The 2014 legislative fiscal session that begins Monday (Feb. 10) will be remembered for two words – Private Option – and three potential votes.

When Republican lawmakers, in concert with Democratic Gov. Mike Beebe, fashioned the novel health care plan for Arkansas, there was no doubt that it would stir controversy. The hard-fought votes to secure the funding’s passage was testament to that.

In short, the private option takes the Medicaid expansion money offered under the Affordable Care Act and allows Arkansas to steer that money into a private health insurance exchange, where four carriers have a variety of plans for citizens of all income levels.

The funding votes in the Joint Budget Committee and on the floor of the House and Senate were close in the regular session of 2013.

Get ready for a replay in 2014, but consider two major factors that have boosted momentum for opponents of the plan.

First, the botched roll-out of the federal health care law has given tremendous momentum to those who disagree with the program. Secondly, the timing of a new private option funding vote – which requires three-fourths of approval from both legislative chambers – will take place less than a month before filing period opens for political office in Arkansas.

With many Republicans fearing conservative challenges from their right flank in party primaries this Spring, the political repercussions of a new vote will be felt.

Some supportive lawmakers argue the vote will already be on their record so why change it; others contend they can defend a shift in their position. The private option, which has garnered national attention, only passed with two votes to spare in each chamber, so the margin for error is miniscule.

One State Senator, Missy Irvin, R-Mountain View, says her support has altered, and the Senate’s newest member, John Cooper, R-Jonesboro, is an ardent opponent of the private option.

Gov. Mike Beebe (D) and House Speaker Davy Carter, R-Cabot, sat down recently for interviews on the topics and you can view their comments at the bottom of this post.

TAX CUTS
Beebe has been touring the state in recent months making the case that as much as $140 million in tax cuts approved during the 2013 regular session were only possible through projected savings tied to the private option.

Lawmakers don’t view it that way. Several key lawmakers, including Revenue and Tax chairmen Sen. Jake Files, R-Fort Smith, and Rep. Charlie Collins, R-Fayetteville, have been outspoken that tax cuts can stay even if the private option funding renewal vote fails.

While the legislature will not likely vote on any tax reform measures in the 2014 fiscal session, they will be the topic of debate during the course of other budget decisions.

PRISONS & TEACHERS INSURANCE
Another financial quagmire that will be the focus of legislative attention is following up on the state’s teacher insurance crisis.

Arkansas lawmakers convened for a special session in October 2013 to address an expected $53 million shortfall in the teacher insurance fund. They plugged $43 million from the state’s $169 million surplus into the fund to help close the gap. The remaining difference is to be largely made up by a 10% premium increase for teachers and other public school employees utilizing the insurance plan.

Major long-term reforms included a restructuring of the oversight board that reviews the insurance plans’ benefits. Lawmakers will reshape the board to have more representation from teachers and members with a background in employee and insurance benefits. Expect updates and scrutiny to these reforms as legislators are keeping a watchful eye on the issue.

Also, state prison officials took the extraordinary step during budget hearings to request money above the Governor’s recommendation to ease overcrowding at county jails and to study the feasibility of building another prison for the state’s growing inmate population.

Legislative support – particularly those tough on crime in the wake of last year’s parole shortcomings – will likely be there.

THE VACANCY
Finally, lawmakers and the Governor seem to be on the same page with avoiding a special election to fill the vacancy of Lt. Governor created by Mark Darr’s resignation.

Darr’s exit due to ethics violations presented a tricky challenge for the state’s constitution. The Lt. Governor’s post is the one office where the Governor can’t fill the vacancy by appointment, as Beebe did when Treasurer Martha Shoffner resigned.

Legislators will likely tweak language in the election code that allow the office to remain vacant since it is an election year and the office is up for grabs between a slate of candidates. The timing calendar for a special election would be tricky from a logistics perspective, and for voters it would add to confusion with the activity already expected on this year’s ballots.

Seven artists and their songs about Arkansas have been selected from more than 230 entries as part of the “Song of Arkansas” contest conducted by the Arkansas Department of Parks & Tourism. The public is being invited to pick a winner among the seven.

The entries were first filtered by a panel of judges. The judges included rock and roll pioneer Sonny Burgess, Broadway performer Lawrence Hamilton, award-winning director Jason Moore, Jimmy Buffett Coral Reefer Band member Mike Utley and The Wolf 105.1-FM morning show team Bob Robbins and Jennifer Trafford.

Voting began Monday (Feb. 10) and will continue through Feb. 24, with one vote per e-mail address. Plans are for the winner to be announced March 3, and the winning musician will perform at the 40th Annual Arkansas Governor’s Conference on Tourism in Rogers on March 10. The winner also receives a recording session and taping of a video of their winning entry along with $2,000.

Following is a brief bio of the finalists. Follow the link at the end of the bios to hear the songs.

• Barrett Baber with Kenny Lamb
“A.R.K.A.N.S.A.S. Get There From Here”
The son of a Baptist preacher, Barrett grew up with music in the church, growing into choral music and eventually heading to Ouachita Baptist University, where he learned songwriting and how to play the guitar. He left OBU to head to Nashville to apprentice as a songwriter then returned to Arkansas to complete his education. While at UCA, he met his wife. After working in advertising in Little Rock and Fayetteville, Barrett turned to a new pursuit, teaching debate and forensics to students at Fayetteville High School, two years ago.

• Chana Chaylor
“Come Home to Arkansas”
The spa director who works in Mount Ida today started out playing piano when she was just eight years old. By the age of twelve she was singing and playing piano in church. A lifelong Hot Springs native, Chana has performed in piano bars and entertainment venues both inside and outside the Spa City. The musical repertoire of the married mother of three includes everything from Billie Holiday to Whitney Houston to Patsy Cline. She’s working on her first original album.

• Blane Howard
“Arkansas Y’all”
Blane’s family moved to Hot Springs when he was two. He grew up singing and developed a deep love of songwriting. After high school he left for Nashville to get his degree in music from Belmont College. Today he’s a full time musician with one EP already released, “‘Bout Time.” He heard about the Song of Arkansas contest from his mom when he came home for the holidays.

• Jeremy Huddleston
“Here in Arkansas”
Jeremy lived his entire life in Russellville until heading to southern California last June to plant a new church with three other families. Before that, he was on staff at the Journey Church in Russellville for nine years and the drummer for local Christian act Nick and Sam. Jeremy and his two sons love hiking Petit Jean Mountain, Mount Nebo, Mount Magazine and all around the Arkansas River Valley. While the ocean views are pleasant in California, he misses the woods and trails of Arkansas.

• Matt Knoble
“Right Here in Arkansas”
Matt has always been around music – growing up in Haskell (near Benton) and playing trumpet in the band at Harmony Grove High School. After four years in the University of Arkansas Marching Razorback Band he and his wife relocated to the Bentonville area. Today, Matt teaches 5th grade Social Studies and plays guitar in the worship ministry at church.

• Candy Lee
“Here in Arkansas”
Candy graduated from Florida Girls State University and moved to Arkansas after friends in Fayetteville sent her photographs of the Ozarks. She fell in love with the beauty of The Natural State and relocated. The waitress and folk jazz artist has been involved with chorus throughout her life, and as an adult, she learned how to play the guitar. She loves riding her bike on paths throughout the Razorback Greenway and visiting Devil’s Den State Park. Her first album, "The Gate," was released in 2010; she’s currently recording her second.

• Pamela K. Ward
“Natural State of Mind”
Pamela’s family has had a farm in McRae for over a hundred years. Her grandfather was involved with the Sugarloaf Opry, and she first took the stage to sing at the age of two. She decided to take up the saxophone after seeing a performance at the Arkansas State Fair when she was seven. Growing up, she spent some weekends performing at the Ozark Folk Center and others on Beale Street in Memphis. During her career she’s tackled nearly every musical genre. Today, she lives and works in Nashville.

Link here to listen to the seven songs.

A variety of issues that specifically affect the elderly population in the state of Arkansas was the topic of discussion at Monday's (Feb. 10) League of Women Voters meeting in Fort Smith.

Panelists addressed how league members and residents could assist in a variety of different areas — food insecurity among the elderly, dealing with Alzheimer's disease and preparing legal documents for the elderly.

Ken Kupchick, director of marketing and development at the River Valley Regional Food Bank, said a common problem among individuals older than 75-years-old is not having enough food. Recent moves by the U.S. Congress, including the passage of a new Farm Bill that cuts the SNAP (Supplemental Nutrition Assistance Program) by about $800,000 every year for the next decade, have made food insecurity an even larger issue as many are struggling to make ends meet while also having food to eat.

"The bigger problem in Arkansas is actually getting seniors to enroll in SNAP in the first place," he said. "The participation rates in the state over all (is) at about 73-77% of those eligible. But when it comes to those seniors, that drops to under 50% and one of the things we need to do is get more seniors into the SNAP program, which only exacerbates the problem all the more (when budgets have been cut)."

According to Kupchick, a large reason seniors do not sign up for a program like SNAP even when they are in need is because of a supposed stigma associated with what their generation may consider to be "welfare." He said others may not enroll because they do not assume that they will get enough to make a dent in their monthly grocery budgets.

"Many of them think they'll only get about $16 a month, which is the minimum qualification," he said. "But if you reverse that and say, 'Hey, coupon clipper. How would you like $16 worth of free groceries at the grocery store?' every senior would grab them. We have to fix that problem more so than we have to worry about the take away. It's getting more enrollment."

Kupchick said programs to help seniors, such as SNAP, should be promoted to seniors not only to make sure they stay fed and healthy, but also to promote economic development in the community. He said while his group gave away $12.7 million worth of food in 2013, some economists he had spoken with place the economic impact of those food giveaways at $22 million due to seniors and other food recipients being able to pay their rent on time and being able to afford other items, as well.

ALZHEIMER’S ISSUES
Melissa Curry of the Arkansas Alzheimer's Association was also on hand to discuss ways caregivers can provide assistance to those battling the sixth leading cause of death in the United States.

It is an issue Curry said is vital for caregivers and patients, as an estimated 65% of caregivers die before patients "because it's so mentally, physically, emotionally, and spiritually draining. So that's why we're trying to help right now, the Alzheimer's Association, to give them that support."

She advised individuals to contact her organization for help finding resources to not only care for a loved one, but also to get emotional support for themselves. Among the help her group could provide is connecting caregivers with organizations that can provide financial assistance for medical care, such as the Veterans Administration for veterans and their widows, or signing patients up for Medicaid.

Curry also advised audience members to know what the warning signs of Alzheimer's are and to find ways to deal with the disease and the affected patient without stripping them of their dignity. Among the tips is writing a list of concerns to share with doctors or nurses at upcoming appointments instead of discussing the issues right in front of the patient, or having a doctor notify a patient that their condition makes them unsafe to drive a vehicle instead of the caregiver simply taking away the keys.

As seniors move from healthy and independent to needing assistance or simply closer to the end of their lives, attorney Todd Whatley of The Elder Law Practice said it was important to get legal documents in order such as power of attorney. He also answered questions from the audience on issues such as how funding long-term could happen, whether an individual has Alzheimer's or some other ailment.

"If the person is broke, the person with Alzheimer's is broke, and their income is below the limit…then Medicaid will provide some care during the day, whatever they decide she needs, they will then come in and provide that care."

He said should a long-term nursing facility be needed, families can rent out an individual's home and use the rent generated to pay for medical costs, even as Medicaid is funding the remaining amount.

Whatley also said families in need of legal assistance should call on a firm that specializes in senior care, such as The Elder Law Practice. If finances are an issue, he said, those families can get legal assistance from other groups, as well, including the Alzheimer's Association.

And while there are programs available to provide assistance, the key to seniors being able to tackle their golden years is preparation, Kupchick said, again specifically addressing food insecurity.

"If you're not entering into your retirement years with enough safe guards, you're definitely going to be amongst the food insecure. And what we find here is if you've lived your life in low-income situations, if you didn't graduate from high school, if you remained a renter most of your life, if you are one minority or another, if you live in the South, if you're living alone or if you raised a grandchild — all of these things impact your food insecurity as we age."

Punctuated by the high-energy rock riffs of Rush and massaged by the distinct baritone voice of advertising pitch man Mike Rowe, Wal-Mart Stores Inc. has in recent days placed a high-profile advertising commitment on the company’s pledge to return manufacturing jobs to the U.S. 

Jim Karrh, a marketing and public relations advisor with more than 20 years experience and owner of Little Rock-based Karrh & Associates, said Wal-Mart has certainly “reached a huge mass audience” with their manufacturing initiative through the new ads. (The three ads can be viewed at the end of this story.)

“They have pushed the chips to the center of the table,” Karrh said, using a gambling reference to suggest the company is now “all in” publicly with the effort.

On Monday (Feb. 10), Wal-Mart spokeswoman Katie Cody said there have been “more than 2,000 job commitments” as a result of the effort to buy products from U.S. manufacturing operations. More are expected. Cody said more than 40 different Wal-Mart departments are “actively working” with existing or potential suppliers to find opportunities to source products from U.S. manufacturing operations.

Some of those 2,000 commitments include 500 jobs related to the planned production of televisions in Winnsboro, S.C., and 250 jobs planned to begin in March 2014 at a shoe production plant in Hazelhurst, Ga.

INITIATIVE HISTORY
The 30-second television ads – which have found air time during broadcasts of the 2014 Winter Olympics – attempt to show the early results of the 2013 pledge by Wal-Mart to buy an additional $50 billion in American products over the next decade. Bentonville-based Wal-Mart estimates cumulatively over the next decade the investment will total $250 billion. The Boston Consulting Group predicts that this $250 billion investment will create one million jobs, including the jobs in manufacturing and related services.

Wal-Mart conducted a manufacturing summit in Orlando, Fla., in August 2013, with an estimated 500 suppliers attending and representatives from 38 state governments, including eight governors. Arkansas Gov. Mike Beebe was one of the eight attending. A 2014 summit is set for Aug. 14-15 in Denver, Colo.

The initiative has already proven beneficial to Wal-Mart’s home region. Redman & Associates in October announced a $6.5 million investment to relocate its ride-on toy manufacturing business from Shanghai to Northwest Arkansas over the next three years. Redman operates a sales office in Bentonville that employs 16 people. Moving the manufacturing to Northwest Arkansas is estimated to create 17 jobs the first year, and ramping up to 74 by the time the entire operation comes online in Rogers.

Walmart U.S. CEO Bill Simon announced Jan. 23, 2014, a $10 million innovation fund from the retailer and its foundation to spur new U.S. manufacturing commitments that lead to job creation. The fund will provide grants to innovators in the manufacturing sector and seeks to create new processes, ideas, and jobs that support America’s growing manufacturing footprint.

‘AT ONE TIME, I MADE THINGS’
The three television ads made public by Wal-Mart are busy with alternating scenes of factory work with hard hats, eye protection, sparks flying, empty bottles moving along an assembly line, forklifts moving pallets and impact wrenches buzzing. 

The “I Am a Factory” ad featuring the voice of Mike Rowe begins with the image of a closed manufacturing site, complete with a padlocked gate.

“At one time, I made things,” emerges the voice of Rowe. “I was mighty and then one day, the gears stopped turning.”

As as factory work begins, Rowe continues: “But I am still here, and I believe I will rise again. We will build things, and build families, and build dreams. It’s time to get back to what America does best.”

The ad then closes out with the Wal-Mart message: “Over the next ten years, we’re putting $250 billion to work to help create new manufacturing jobs in America.” And that’s followed by Rowe saying, “Because work is a beautiful thing.”

The “Lights On” ad carries the viewer 10 seconds into a dark space. The action begins when a worker turns on the lights. Doors open, coffee makers are prepped and pallets are stacked and prepped for loading.

“Actions are louder than words,” the ad notes.

‘WORKING MAN’
Although the Rush song “Working Man” makes the point for Wal-Mart in the title, the lyrics of the song have historically been considered an anthem for the working man who can’t seem to rise above their economic class no matter how hard they work.

The song lyrics, included in the Wal-Mart ad, note: “I got no time for living, yes, I’m working all the time. Seems to me I could live my life a lot better than I think I am. I guess that’s why they call me, they call me the working man.”

Some comments on Wal-Mart’s YouTube page note the issue between the song title and the lyrics.

“I think you missed the point of the song,” noted one comment.

That was followed by, “Agreed. It's almost as bad as when Reagan used Born in the USA for his 84 campaign before Springsteen told him to knock it off.”

Another comment mentioned Rush’s home.

“The irony of Rush being Canadian is killing me but otherwise this is a fantastic spot and a great tribute the all the Working Men and Women. Well done.”

‘GETTING BACK TO BASICS’
Cody, with Wal-Mart, said the imagery of the ad is the point of the message.

“The important thing is the energy of the music and highlighting the people working in the factory,” Cody explained.

No matter the irony or lyrical message, Karrh said it’s a smart move by Wal-Mart. He said his initial impression is that Wal-Mart is using the ads to also return to the company’s “foundational Americana” message. He said the ads could be seen as not only the promotion of returning jobs to America, but of Wal-Mart “getting back to basics and back to what is authentic to them as well.”

“I immediately thought, ‘OK good,’” Karrh said after his first viewing of the ad with Mike Rowe. “They’re bringing back a piece of the Wal-mart story that has always been true to them, but I think it got lost and minimized a bit over the years. ... I hope they stick with it.”

Cody declined to provide detail on the ad cost and air time purchased, but did say that broadcast time has been bought for all three ads.

The financial picture at Van Buren-based USA Truck appears to be improving, but the company still posted a net loss of $9.11 million in 2013. While an improvement compared to the net loss of $17.671 million in 2012, it marks the fifth consecutive year of losses for the trucking company.

According to the earnings report released early Tuesday (Feb. 11), the company would have posted a fourth quarter gain if not for a $5.97 million charge to boost the long-term claims liability reserve and a $1.5 million charge for expenses related to fighting the hostile takeover attempt by Phoenix-based Knight Transportation. That attempt came to an effective end on Feb 4. with a "standstill" agreement approved by both trucking companies.

Instead, the fourth quarter saw a loss of $4.636 million, more than the $3.24 million in the fourth quarter of 2012. The 45 cent per share loss missed the consensus estimate of a 1 cent per share loss. Revenue for the quarter was $141.416 million, up 4.93% compared to the same period in 2012.

For the full year, the company posted a loss of $9.11 million, better than the $17.671 in 2012. The company posted a 2011 loss of $10.77 million, a 2010 loss of $3.308 million, and a $7.177 million loss in 2009.

Revenue for the year was $555.005 million, up 8.3% compared to revenue in 2012.

'TURNING POINT'
"The fourth quarter capped a turning point year for USA Truck, with improvements in virtually every area of our business," President and CEO John Simone said in the earnings report. "Our results reflect the growing positive momentum of our strategic plan, which focuses on three critical areas – operational execution, profitable revenue growth and cost effectiveness.”

The one-time charge is a function of the company being self-insured. The decision to take the charge came “right at the wire” at the end of the quarter and was a tough call.

“it was disappointing that we had to take the charge, but it was the right thing to do,” Simone said in an interview with The City Wire, adding that it will help level costs going forward.

The report noted several areas in which company officials reported improvements. Those include:
• Reduction of debt by $12 million;
• The first quarter of positive operating income since the second quarter of 2011;
• Operating income growth of 74.4% for the year in the Strategic Capacity Solutions segment; and
• Increased length of haul and increase in rates during the quarter.

"We are very pleased with our fourth-quarter performance, especially since we are still in the early stages of implementing our turnaround plan and see many opportunities for continued improvement,” Simone noted in the report. “Given the substantial headway we have made over the past year and the momentum we carry into 2014, we believe our goal of returning USA Truck to profitability is achievable for the full year 2014." 

BACK IN THE BLACK
Returning to profitability in 2014 will require continued improvement in the company’s operating ratio, which remained relatively high at the end of the year. The year end operating ratio was 105.4, meaning that the company lost $1.054 for each dollar in revenue. However, that operating ratio was an improvement over the 110 operating ratio at the end of 2012. The operating ratio for the fourth quarter was 109.1.

During an interview with The City Wire, Simone said he is confident the OR will keep moving in the right direction and the company will be “fully profitable” in 2014.

“We have 17 areas that will provide significant cost savings to our business, and some of the largest areas are improving our safety and claims ... and we’re going to be doing that by” changing the hiring process and placing “more rigor around our training programs,” Simone explained.

Another key in improving OR is in controlling costs related to driver retention, Simone said. He said the trucking environment now favors good drivers who have the ability to work for the company that treats them the best. USA Truck operates with a little more than 2,000 company drivers and around 100 owner-operators.

“Good drivers are like free agents today. Good drivers can go anywhere and get a job,” he said.

Retaining good drivers will require the company to ensure driver time is “better utilized” so that drivers are spending as much time on the road and not waiting for new loads, maintenance and other down-time factors, Simone said. Driver utilization was improved, with the company recording a 3.6% gain in miles per seated truck during the quarter.

“We’re here to serve the driver so we can take care of our customers,” Simone said, adding that the company is not perfect in how it works with drivers but is pushing for continued improvement.

The other part of the USA Truck plan to reach profitability is in gaining marketshare and doing more business with existing customers. Simone said USA Truck secured $36 million in net new revenue during the quarter, with the full year seeing $152 million in net new revenue posted. On top of that, the company added three Fortune 500 companies to its top 10 customer list in terms of revenue. Also, 96% of the top 100 customers by revenue purchased more than just one service from USA Truck, up from 67% compared to a year ago.

Link here for a PDF report from USA Truck of its fourth quarter and full-year earnings.

USA Truck shares (NASDAQ: USAK) closed Monday at $14.82. The market responded Tuesday to the report by dropping the price on the thinly-traded stock to $14.07 in mid-day trading. During the past 52 weeks the share price has ranged from a $16.38 high to a $4.37 low.

The economy, particularly in Northwest Arkansas, has seen steady growth in the past two years. But on a national level the number of Americans who consider themselves middle class wage earners continues to shrink, according to a recent report from Pew Research Center.

Economists warn that without middle-class engagement, a full economic recovery is unlikely.

Since 2011, the number of Americans who identify themselves as the middle class has dropped from 52% to 44%. Pew researchers said this is a fundamental shift in how American’s view their income levels.

According to the Census Bureau, the median household income in the U.S. decreased by 8% since the recession began in 2007. Median incomes fell from $55,627 in 2007 to $51,017 in 2012. The median income in 2012 was at the same level it was in 1995, a setback of 17 years, the report notes.

Income losses have been greater for households in the middle of the income distribution than for households at the top. For households in the third quintile of the income distribution, average income fell by 8% from 2007 to 2012. Meanwhile, for households in the highest quintile, average income fell by only 2%. The net result is growing inequality in the income distribution, the research notes.

A separate study Pew conducted in 2012 also found a reduction in the middle of the income distribution. The study used Census Bureau data to classify adults into lower, middle or upper income tiers depending on the income of their household relative to the overall median. The researchers found that the share of adults in the middle income tiers has fallen in each of the last five decades, from 61% in 1971 to 51% in 2011.

Economists have been reporting for years that the lack of job growth in the middle-skill, mid-income levels jobs is creating a gap in earning potential for the middle class. The New York Federal Reserve found that middle class jobs increased 46% between 1980 and 2009. At the same time, low-skill jobs rose 110%, while high-skill jobs increased 100%. The shift has been referred to “jobs polarization” and it continues today with the majority of new jobs announced being low-skill, lower income positions.

Wall Street analysts continue to advise investors to aim high or low but avoid the middle income demographic as it steadily erodes. John Maxwell, head of the global retail and consumer practice at PricewaterhouseCoopers, recently told The New York Times that retailers and restaurants are either chasing richer customers, or focusing on rock-bottom prices to attract budget-conscience shoppers.

“As a retailer or restaurant chain, if you’re not at the really high level or the low level, that’s a tough place to be,” Maxwell said. “You don’t want to be stuck in the middle.”

Restaurants such as Olive Garden and Red Lobster that cater to the middle income consumers have had their woes, while fine-dining chains like Capital Grille and Ruth’s Chris Steak House continue to expand. The local Ruth’s Chris Steak House in Rogers confirmed with The City Wire that it’s in the midst of expanding its patio section to add additional tables and seating to the restaurant.

“We know much of the economic recovery of the past few years is largely attributed to upper-income demographics. But this wealthy class can only consume so much,” said Kathy Deck, director for the Center for Economic Research at the University of Arkansas.

She said this shift away from the middle class is a challenge to continued economic growth and the longer term consequences could result in diminished innovation. Locally, Deck said roughly 26.3% of households earn less than $25,000 and just 26.8% of households earn more than $75,000. That leaves the vast majority in the middle, where incomes have largely stagnated.

“A shrinking middle class is not what people think of when picturing a vibrant economy. Without the middle engaged future recovery will be hindered in the national economy,” Deck said

She also said that while Northwest Arkansas is seeing much broader-based job growth than the nation as a whole, there are still more applicants than there are jobs, particularly in the lower-skill service industry.

“As long as there is a surplus of applicants, there is little chance wages will increase among these service/hospitality jobs. From December 2012 to December 2013, Northwest Arkansas jobs grew at 4.1% clip. This compared to 1.6% nationally,” Deck noted.

While the Northwest Arkansas economy is growing at faster pace than the nation, Deck said it is not immune to effects of the shift income distribution and growth.

A recent report from economists Steven Fazzari of Washington University and Barry Cynamon, of the Federal Reserve Bank of St. Louis, indicated that the top 5% of earners were responsible for 38% of domestic consumption in 2012. The researchers found this was a 10% jump from 1995.

Fazzari reports since the recession ended in 2009, inflation-adjusted spending by this top echelon has risen 17%, compared with just 1% among the bottom 95% of wage earners.

The effects of this phenomenon are now rippling through one sector after another in the American economy. While spending among the most affluent consumers has managed to propel the economy forward, the sharpening divide is worrying, Fazzari notes.

“It’s going to be hard to maintain strong economic growth with such a large proportion of the population falling behind,” he said. “We might be able to muddle along — but can we really recover?”

It took federal Bankruptcy Judge Ben Barry more than an hour Tuesday morning (Feb. 11) to weed through a long list of objections regarding the sale of Allens Canning to private equity firm Sager Creek.

Part of the process required Judge Barry to transfer more than a dozen claims related to the Perishable Agricultural Commodities Act (PACA) to U.S. District Judge Richard Taylor in Arkansas’ Easter District. The claims involve licensing and lease contracts related to commodities managed by Allens. The federal PACA oversees certain contracts related to agriculture commodities.

Once the commodity contracts were moved, Barry quickly approved Sager Creek’s $124.781 million purchase price for Siloam’s Springs-based Allens Canning.

“It’s a good deal, it’s good for the debtors and the creditors,” Barry said as he ordered the approval.

There was one holdout, which was set aside for a future hearing date on Feb. 24, as lawyers for Allens and Sager Creek were told by Barry to work out the terms with Infor Global Solutions, the accounting software company that licensed their product to Allens. The software company is claiming the license is non-transferrable. Council for Allens said its software the company uses daily to run its business and the new owners will need it as well. 

Infor told the court it didn’t object to the sale, but something would have to be done to support the transfer to Sager Creek – likely a fee paid. Barry asked the parties to work out a deal ahead of the Feb. 24 hearing. Barry also commended Allen’s counsel for resolving more than 40 objections filed to the sale ahead of Tuesday’s hearing.

An adversarial case still has to be heard the court, but it does not impact the closing of the sale to Sager Creek. SSS of Crawford County claims that 80 acres included in the sale, does not belong to the debtors. Barry said, “Rather than throw a monkey wrench into the deal, hindering closing, the case can be heard on Mar. 21., understanding the deal is going to close with the SSS claim still hanging.”

Both parties agreed to argue the case of Mar. 21.

Stanley Bond, an attorney for several creditors with PACA claims, asked the lawyers with Sager Creek to guarantee and specify for the court how it planned to pay the outstanding claims. Barry indulged that request.

Mark Weinstein, senior managing Director for FTI Consulting, told the court that an evergreen fund would be established by Sager Creek for the sole purpose of satisfying 100% of the PACA claims filed with court which are subject to the resolution process.

The transcript from the Feb. 7 auction was filed with the court. The document indicated that the opening bid by Seneca Food was $148 million. The bidding was a complicated issued as the three parties taking part in the auction each tailored their offers according to perceived value, subject to breakup fees, working capital or other debt obligations.

Sager Creek had the highest bid at roughly $160 million, but the purchase price was substantially lower at $124.781 million, which included money it was owed by Allens, breakup fees and working capital.

McCall Farms was deemed the backup bid with a purchase price of $119.2 million. Seneca Foods came in third offering a purchase price $117 million. There were just three bidders taking part in the auction, according to the transcript.

Little is known at this point about Sager Creek, a recently formed Delaware-based corporation, according to the court filing.

The president of Sager Creek, James Athanasoulas, is the managing director of Sankaty Advisors, a unit of Boston-based Bain Capital. Sankaty Advisors is a secondary lienholder listed among Allen’s creditors. The amount owed was not disclosed and is now a moot point given its purchase of Allens was approved.

The deal is expected to close by Feb. 28.

The Fort Smith Board of Directors for the first time Tuesday (Feb. 11) heard from an attorney who believes the city may have the authority to level fines against Whirlpool Corp. for its admitted pollution of groundwater in and around the area of the company's former manufacturing facility in south Fort Smith.

The attorney, Melissa Sims of Sims Law Office in Princeton, Ill., reached out to City Administrator Ray Gosack after reading about the contamination issue on the Internet. In a letter to Gosack, Sims explained what her firm could provide the city should she be retained for legal representation.

"As we discussed, I partner with several top tier law firms in the country and together we represent municipalities in utilizing the city's ordinance violations to fine polluters for contamination on a contingency fee basis," she wrote, adding that she began her practice following her work as village attorney in DePue, Ill., where she used the village's nuisance ordinance to level fines against both Exxon Mobil and CBS Viacom for environmental contamination.

"The Seventh Circuit Court of Appeals ruled that no federal preemption applied and we grappled with state law preemption on the issue of abatement (injunction) action. Ultimately, the Village of DePue settled with the defendants for $975,000."

She said her firm, which only charges clients one-third of any judgment against defendants, have the resources to go after large corporations like Whirlpool, while other small local firms may not have the manpower or finances to wage a tough battle.

"I have other cases filed – and yet to be filed – in Illinois and other states working with large firms on a contingency fees basis to assist cities such as Fort Smith seek restitution for contamination from old factories which have reaped enormous benefit from spreading hazardous materials."

Sims, who participated in a conference call with the Board during Tuesday's study session, said in the case of Fort Smith, it could be possible to fine Whirlpool for not only polluting the land where the company sits, but also other properties where a toxic plume of trichloroethylene (TCE) has migrated in groundwater during the 30 years since the company's admitted spill of the cancer-causing chemical.

The local ordinance that could be used is the city's ban on littering, which imposes an initial $500 fine and subsequent $250 fines for everyday the litter is not cleaned up.

Sims said her initial research on Arkansas' statute of limitations laws indicates that municipalities, such as Fort Smith, may not have a stated timeline of how far back in time a city could go when it comes to imposing a fine, though a lot of it depends upon how far back it can be proven that the violator, in this case Whirlpool, committed the violation. By the company's own admission, TCE contamination occurred in the early 1980s, a time when the company stopped using the degreasing agent at its Fort Smith manufacturing facility.

In discussing the possibility that the city could retain counsel to pursue fines against Whirlpool, City Director Keith Lau raised the issue of whether pursuing legal action against the company would hurt the city's attempts to attract other businesses.

"We want to protect the citizens, I understand that. We want to protect and enforce our nuisance laws, I understand that. But we've also all talked about being business friendly in the city of Fort Smith and promoting industry. What kind of message does this send — and it's just something to think about — what message are we sending if there's an industry out there that inadvertently contaminates the groundwater, brings it to us, goes to the ADEQ, goes through their steps of remediation and then at the very end, we sue them — not sue them, fine them — for contamination? So there's a balancing act here and I'm not sure I'm comfortable with this."

City Director Philip Merry challenged Lau's statement, recalling how long it has taken Whirlpool to address the contamination that has spread from its facility to the neighborhood north of the factory.

"I can't imagine that there's a company out there that would think that 30 years is (a) fair timeframe to rectify a problem. And I can't imagine there's one out there that would find our litter laws so strong that they don't want to come (and) have to comply. I'm asking that we definitely allow this professional to dig in for free to see laws have been broken and recommend back to us what laws have been broken and what she thinks would be a fair thing to request and then we make the decision at that time. I think to not make an informed decision, as in to allow her to dig in and recommend for free, would be remiss on our part."

Merry made a motion to place the consideration of retaining Sims on the Feb. 18 Board agenda for a vote, with City Director Pam Weber seconding the motion.

Should Sims determine the city could impose fines on the city, she said it could up a month after being retained by the city before any court actions against the Benton Harbor, Mich.-based company are filed.

If fines are imposed and Whirlpool is found in violation or settles with the city, Gosack said Arkansas was clear that the money would have to be used for "governmental purposes," which he said could include infrastructure improvements or economic development initiatives, such as enlisting outside help to market the Whirlpool site to interested buyers. He said any money collected could not, by state law, be distributed to residents living above the plume, many of whom are engaged in a class action lawsuit against the company.

Following the meeting, resident Debbie Keith, who has been a vocal advocate for citizens in the contaminated area, voiced support for possible fines against the company and expressed disappointment at Lau's statement about the message imposing fines would send to businesses wanting to locate in Fort Smith.

"I think the city of Fort Smith should set a precedent and say this is not going to be acceptable. If you want to come here and do business (as) a blue collar industry, then you need to be responsible," she said. "It's absolutely ridiculous at this point in the game that we would even consider what Whirlpool thinks by any means. And yeah, they should be punished. If we have to slap their hands and tell them no, this is not acceptable…ADEQ should have done it. That's their job. ADEQ's not done their job, so we're being forced to do something."

A Tuesday (Feb. 11) Board of Visitors meeting at the University of Arkansas at Fort Smith provided an update to three new degree programs at the university, as well as two new certificate programs and an update on the state's coordination of educational efforts across all grade levels.

The new degree programs launched at UAFS this year are bachelor's degrees in international business, finance and general studies.

According to Dr. Georgia Hale, interim associate provost for academic affairs and dean of the College of Applied Science and Technology, each degree program meets a need on the university's growing Fort Smith campus.

The new international business degree was designed to meet the needs of today's global economy, she said, fulfilling student and workforce demands.

"Students want to work in industries that have a global perspective and this will give them an opportunity to look at, go beyond American business (and) into international business," she said. "And also as they progress, it gives them more job opportunities because they will have an international perspective from the courses they've taken here."

UAFS's new finance degree was brought about after university officials noticed a rise in the number of business majors who were maxing out the number of finance courses students were taking as part of their degree programs.

"We did surveys and a lot of our students said if we had a finance major, they would certainly go into that area of study," she said, adding: "On the national level, the demands growing for students who have a background in finance."

By adding the major, the College of Business is now among the other 69% of accredited business schools that offer a finance major. While the finance major is a useful standalone degree, Hale said there is an expectation that many accounting majors may choose to double major now that the degree has been offered.

The third new degree offering is a bachelor's in general studies, which allows students with 45 hours in another major to apply those credits toward a general degree. According to Hale, the degree is targeted to students who either decided to change majors or were not accepted into some competitive academic programs, thereby allowing them to complete a degree with the hours already earned toward a specific major.

UAFS has also added two new certificate programs this year — a certificate in professional sales and another in robotics. The need for additional robotics education was a result of the university's notice that various companies across the state, including 21 in the Fort Smith region, are utilizing robotics of some sort in the course of doing business and yet there is not a single trained technician in the state, according to Hale.

In launching the new certificate program, UAFS Chancellor Dr. Paul Beran said he was able to secure $300,000 from Gov. Mike Beebe to help launch the program, as well as receiving a donation of equipment from Baldor.

With the equipment in place, Beran said the next step is getting faculty trained and ready to lead the state in robotics education.

"With this contract also comes a significant amount of training for our faculty, so they are truly proficient and have a high skill set themselves so their ability to teach it matches and exceeds what people need to know when they go out in the industry."

He said the program was not "on a whim," but was created after much research. He added that the closest known robotics program at a university was in Indiana, confirming the need for such programs in Arkansas.

The three new bachelor's degrees and two new certificate programs come nearly a month after UAFS announced it was in the early stages of preparing a new master's degree in healthcare administration, the university's first master's-level program.

In other business, Dr. Mark Arant, dean of the College of Science, Technology, Engineering and Mathematics and the interim dean of the College of Education, presented the annual report of the Arkansas Commission for Coordination of Educational Efforts.

A meeting of the Barling Board of Directors Tuesday (Feb. 11) billed as an economic development study session quickly spiraled into something else entirely.

"Maybe this being called an economic growth study session was probably the wrong terminology. Maybe it was a Barling beautification study session," said City Administrator Mike Tanner after the meeting.

The reason for the distinction is because the study session, which was meant to get input from city directors on how to spur economic development in the city, instead focused almost entirely on landscaping, sidewalks and signs along Fort Street, a continuation of Fort Smith's Rogers Avenue that runs through the heart of Barling.

While the meeting may have deviated from its original purpose, it had a few moments of discussion of economic development when City Director Bruce Farrar addressed the need for the city to have what he said was the equivalent of a business plan.

"We need to develop a one year plan, a five year plan, a 10 year plan and a 20 year plan, like a business does. This is what we're going to accomplish this year, this year we're going to finish this project," he said. "I've been on this Board 13 years and we have never had a plan or a project. We always fly by the seat of our pants. I think it's time we change."

Farrar said property values have declined in the city, adding that his personal research has shown homes sold in Barling sell at 10%-15% less value than comparable homes in neighboring communities such as Fort Smith and Greenwood. The long-time Board member added that it takes three to four times longer to sell a home in the city, with the community only having two homes sold with values above $140,000 in the last three years. According to Farrar, the culprit is Fort Street, which he called an eye sore.

It was at this point that talk shifted from economic development to beautification, with Board members focusing more on the aesthetics of the street than attracting business and industry.

Farrar himself proposed a stricter set of rules governing construction of buildings in the city, along with stricter ordinances governing the installation of signs and upkeep of property. It was something Mayor Jerry Barling immediately attacked while taking a shot to his city's western neighbor.

"You don't want to be as restrictive as Fort Smith is, because I'm telling you they killed development in Fort Smith," he said. "When you have to spend $4,000 to set your garbage can at a particular area of the property, business isn't going to like that."

The Board came to an agreement to be voted on at a later meeting that it would attempt  to move forward with developing a plan to improve the city's appearance ahead of the opening of two big projects in the city in the coming years — the opening of a section of Interstate 49, which will end at Fort Street and Arkansas Highway 59, and a planned outdoor shopping mall in development at the same intersection, with an opening scheduled sometime in 2015 at the earliest.

Tanner said both projects could give the city the momentum it needs to see growth, now that it is no longer bound by Fort Chaffee to the south and east, essentially solving the dilemma of how to spur economic development that was the original topic of discussion at Tuesday's meeting.

"With this mall coming in, the economic growth should basically take care of itself. Just hopefully with the economic growth and the beautification — taking care of the signage and the sidewalks — that will lead to other retailers wanting to move to Barling," he said after the meeting.

As part of planning for that future growth, Tanner said an ordinance placing a vote on a one cent sales tax before the voters in November could give the city much needed funding to improve roads across the city as Tanner and other city leaders plan for the increase in traffic expected with the I-49 and outdoor mall opening.

The sales tax would be the second one to be voted on in a year, after Barling voters last year approved a one cent sales tax to fund improvements to the fire department. Because of an error in certifying the election, Tanner said collection of that tax will not begin until April 1, tacking on an overall sales tax of 8.75% on all purchases made in the city. If the latest sales tax is approved, it would bump the rate to 9.75%.

A vote by the Board on placing the item on the November ballot is expected as early as the March 11 meeting.

Hospitality tax collections in Fort Smith and Van Buren were down in 2013 compared to 2012, ending two consecutive years of gains for both cities. The tourism chiefs in both cities say 2014 will continue to be challenging for the regional tourism industry.

Collections in Van Buren during 2013 totaled $423,221.83, remarkably close to the $423,222.91 during 2012. December collections were $32,071, down 1.2% from the $32,451 in December 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, said wintry weather in December likely resulted in the monthly decline. She said the January tally will also see a weather effect.

“January numbers are already reflecting (a) slow down caused by the bad weather. Lodging numbers for December were strong, but restaurants struggled with the icy, snowy weather and a weak economy. Preliminary numbers are showing this same trend for January 2014,” Koeth said.

Koeth said she expects 2014 tourism activity to be similar to 2013.

“Lodging ended the year above last year, but restaurants were down and are staying down. Due to the economy, specifically the smaller paychecks, we continue to see a change in the dining out patterns of consumers. I don't see that changing in the near future,” she said.

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 during 2013 totaled $731, 057, down 2% compared to the same period in 2012. The gap in collections improved through the year with first quarter collections were down more than 6% compared to the 2012 quarter. For the fourth quarter, collections were up 0.62% compared to the 2012 quarter.

The city collects a 3% tax on lodging.

The 2013 tally in Fort Smith was boosted by a healthy jump in December. December collections were $52,204, up 15.7% compared to December 2012. Claude Legris, executive director of the Fort Smith Convention & Visitors Bureau, said “a wide range of factors” caused area hotels to be more full than normal.

Candlewood Suites reported a 40% increase in collections thanks to several construction crews staying in the extended-stay hotel. Hampton Inn saw December revenue jump 29% thanks to utility crews using the hotel as a base while they worked winter weather related power outages.

The Holiday Inn in downtown Fort Smith hosted a robotic competition that helped boost the hotel’s revenue 26% in December. In 2012, the competition was split between days in November and December, Legris explained. Also, the La Quinta Inn was up 46% in December because all its rooms were open. In December 2012, areas of the hotel were closed for renovations.

During 2012, Fort Smith hospitality tax collections totaled $746,182, up 5.37% compared to the 2011 period. The 2011 collections were up 4.3% compared to 2010.

Legris said he is projecting a 4% increase in collections during 2014, but admitted that reaching the target “will be a little bit of a challenge.”

TOURISM EMPLOYMENT, ARKANSAS COLLECTIONS

Employment in the region’s tourism industry was 9,000 during December, down from 9,100 in November and above the 8,700 in December 2012. The sector reached an employment high of 9,800 in August 2008.

Average monthly employment in the Fort Smith metro tourism sector ended a two year decline in 2012. During 2007, 2008 and 2009, the average monthly employment was 9,300. That fell to 8,700 during 2010, 8,500 during 2011, but rose to 9,000 during 2012. The sector reached an employment high of 9,800 in November 2008.

Arkansas’ tourism sector (leisure & hospitality) employed 103,400 during December, down from a revised 103,700 during November, and above the 102,900 during December 2012. At a revised 103,700, the November employment tied a record for the sector that was first reached in January 2013.

Arkansas’ 2% tourism tax receipts totaled $11.967 million for the first 11 reporting months of 2013, up 2.95% compared to the $11.624 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 Regional Intermodal Transportation Authority (RITA) voted Wednesday (Feb. 12) to contract with Washington, D.C.-based The Normandy Group to host a meeting during the summer in hopes of bringing together key players in government and industry in hopes of eventually securing funding for the construction of a $23 million inland port along the Arkansas River.

According to Mat Pitsch, intermodal project manager for the Western Arkansas Planning and Development District (WAPDD), said the organization approached RITA about hosting the meeting 

"We've been approached by an entity who saw (our ongoing plans for a new inland port) in the public eye, a former staffer for Sen. Boozman who works for a group that what they do is bring all parties to the table, whether it's elected officials, whether it's the shipping lines, whether it's the railroad companies, the big shippers, (agriculture) businesses, the retailers that use big shipping. They, for a fee, would host a major meeting, try to coordinate all those people to be there are the right time and our board is considering that at today's meeting."

Former Boozman Chief of Staff Matt Sagely is the individual who reached out, according to Pitsch, with himself and Fort Chaffee Redevelopment Authority Executive Director Ivy Owen meeting with Sagely during a visit to Washington in January.

RITA, which is funded jointly by various local governments including the cities of Fort Smith and Van Buren, will split the cost of the $20,100 contract with the FRCA.

Owen said bringing government and business leaders together using The Normandy Group was "an investment," which is why the FCRA board approved its half of the expenses shortly after Owen's trip concluded.

"We think it is so important that this happen, and I was so impressed with this meeting we had in D.C. and the wherewithal that these people have and the ... what they can do to bring these people to the table. It is worth our investment to get them here. It's vitally important that we get these people here to talk to us."

Pitsch told The City Wire that the proposed inland port, what he referred to as a harbor, would be located nearly Lock and Dam 13 in Barling, on land that used to be part of the U.S. Army installation at Fort Chaffee. The location, he said, provided easy access to the river as well as railroads and Interstate 49 when it is completed, though a timeline for completion of the interstate is still largely unknown at this time.

The U.S. Army Corps of Engineers is completing a study on the port and whether it would be a feasible venture. There is a possibility that RITA could obtain Corps funding of up to $7 million for the project, though the meeting planned for this summer by The Normandy Group would look to make the project a public-private partnership should the right opportunity between a private group and RITA present itself.

As for how the proposed port is different than the other ports along the Arkansas River today, Pitsch said this port would have capacity to handle large containers normally unloaded at ports along the West Coast.

"Probably the easiest way to analyze it, and of course those people are at our meeting today, is in the trucking industry you have short haul, less than truckload (LTL). Well, in the shipping industry, what we're heading towards is a containerized and not necessarily defined as containerized, but something so large in its bulk that you wouldn't just ship a partial load. And I think that's where we're headed. We've had customers in this region step forward and said, 'That's what we want.'"

Ports already in existence on the river, he said, are not structured to handle the capacity.

While some may question the need for the port, RITA Chairman Robert Null said the completion of the expansion of the Panama Canal next year will open this part of the country to a whole new customer with coastal cities, including Newport News, Va., already preparing for the onslaught of container traffic to reach their shores.

It's that region, Null said, that The Normandy Group has helped before, showing that the company can follow through on bringing the big players to Fort Smith for a meeting in June. Asked whether he had confidence in the company's ability to replicate the success in the Fort Smith region, Null expressed no doubts.

"You asked the question, 'Can this group pull it off?' We've looked at it. They've got a history of it. We think they can pull it off."

A recent report by the Guttmacher Institute reported that abortion rates in the United States had hit its lowest levels since 1973, and that the rate also declined in Arkansas by dropping from 13.6 abortions per every 1,000 women in 1991 to 7.6 abortions for every 1,000 in 2011.

Even though conservatives may want to point to an increase in restrictions for abortions in some states across the South and Midwest for the decline, the report said data would not back the assertion.

"While the study did not specifically investigate reasons for the decline, the authors note that the study period (2008–2011) predates the major surge in state-level abortion restrictions that started during the 2011 legislative session, and that many provisions did not go into effect until late 2011 or even later. The study also found that the total number of abortion providers declined by only 4% between 2008 and 2011, and the number of clinics (which provide the large majority of abortion services) declined by just 1%."

The report also noted that abortion is “a common experience.”

“At current rates, about one in three American women will have had an abortion by the time she reaches age 45. Moreover, a broad cross section of U.S. women have abortions. 58% of women having abortions are in their 20s; 61% have one or more children; 85% are unmarried; 69% are economically disadvantaged; and 73% report a religious affiliation,” noted the report.

The Guttmacher Institute advocates for “reproductive health and rights,” and supports access to abortion.

ABORTION REDUCTION DEBATE
Rose Mimms, executive director of Arkansas Right to Life — a pro-life group based in Little Rock — said she believed groups like her's were responsible for the drop.

"I think the pro-life movement as a whole should get some of the credit. We have been focusing on education over the last 40 years about the development of the unborn child during the first eight weeks (of gestation). Most abortions are done in the first trimester and many women are told it's just a clump of cells and that's just not true."

Director of Marketing and Communications Susan Allen of Planned Parenthood of the Heartland, which has offices in Fayetteville and Little Rock, did not credit the drop to the pro-life movement, but instead credited the accessibility of birth control for the drop.

"We believe the decline in abortion is largely due to improved access to contraception, and more effective methods of contraception — both of which reduce the rate of unintended pregnancy,” Allen said.

Allen pointed to the increase in the use of long-acting reversible contraception (LARC) as being more effective than other birth control methods, which she said is likely a contributing factor in the abortion rate decline.

"LARCs are some of the most effective forms of birth control," she said.

ABORTION RESTRICTION ISSUES
While the study stated restrictions have not been a contributing factor in the drop in abortions, it did note that Arkansas has several restrictions on abortions. Among them, according to Guttmacher.org, are:
• A woman must receive state-directed counseling that includes information designed to discourage her from having an abortion and then wait until the next day before the procedure is provided;
• Health plans that will be offered in the state’s health exchange that will be established under the federal health care reform law can only cover abortion when the woman's life is endangered, rape or incest, unless an optional rider is purchased at an additional cost;
• The parent of a minor must consent before an abortion is provided; and
• Public funding is available for abortion only in cases of life endangerment, rape or incest.

Mimms said a restriction that pro-life groups have pushed for in other states and which is simply optional in Arkansas is requiring women seeking abortions to see an ultrasound of the fetus.

"It's not required in all states, but in Arkansas we give them the option to see (an ultrasound). I've heard that the people that are outside the abortion center here in Little Rock, they ask the women to ask (their abortion provider) to see their ultrasounds. They've then come out holding the ultrasound (image) and have changed their mind. That is a great resource to be able to see the truth."

It's a point that Allen disputed, adding that an increasing number of abortions are taking place by medication instead of physical procedures, thereby eliminating any chance of individual women seeing an ultrasound of the fetus.

"Abortion restrictions do nothing to reduce abortion, they only make a woman's access to it more difficult," she said. "This new Guttmacher report underscores the need for a woman to have information and access to her full range of options, in consultation with a medical provider and without political interference. Similar to national trends, we have seen increase in the rate of medication abortion, which currently accounts for nearly 60% of the abortions Planned Parenthood of the Heartland provides. Medical abortion is a safe and effective method early in the pregnancy."

The city of Greenwood is hosting the Arkansas Economic Development Commission this week as state’s development arm holds its monthly meeting in the city Wednesday and Thursday. It’s the first time for the commission to be in the Fort Smith region in about three years.

Commissioners and AEDC staff spent much of Wednesday exploring the region on a guided tour led by various Sebastian County natives, including Justice of the Peace Phil Hicks.

According to Commissioner Lee Webb, who also serves as chairman of the Sebastian County Election Commission, the meetings held each month in different parts of the state are a way for the commission to connect with communities and send a clear message to residents and business leaders.

"It shows the support statewide every time the Arkansas Economic Development Commission goes to a city," Webb said. "It shows the state has the community's back. If they ask for something, we're there willing to help."

Bryan Scoggins, AEDC's director of business finance, said the meetings allow "the commissioners to go out and see what's going on in all the various corners of the state."

"When we have these meetings and they get to go to the various communities, they do tours like this to see what's going on in the community, what's the vibe like? What are the needs, even. It doesn't always coincide that the projects that we're looking at are in the meetings, but you still get a feel for the area."

Scoggins said it is visits to communities, such as Greenwood, that illustrate how important the work of the commission is as cities across the state continue to recover from the economic collapse of 2008 and the exodus of jobs that followed.

"The primary things we do is work with the local area economic developers to try to find out what is the vision for how we are going to replace these positions that we lost or who would be target companies to go talk to. Or even if you have targeted companies, then we have meetings with them to try to figure out is there a way for us to make a new project happen?"

As part of those discussions, he said AEDC promotes not only the infrastructure available in certain communities or special financing available through AEDC, but also the workforce available to take jobs should a company locate a facility somewhere within the state.

It is those types of conversations that AEDC started when Gov. Mike Beebe made the trip to Orlando, Fla., in August 2013 to meet with companies looking to relocate manufacturing jobs to the United States as part of a push by Wal-Mart to increase its purchase of American-made goods by $50 billion in the next decade. Scoggins said discussions with companies have continued since then.

"There's been a tremendous amount of interest and activity and trying to work together with and through Wal-Mart to try to identify those opportunities. We've had a couple of announcements along those lines and plans continue."

He said while AEDC is not able to announce anything directly related to Wal-Mart's onshoring effort, talks with manufacturers and suppliers continue. As for how many jobs any new manufacturing facilities could provide the state, Scoggins said that would be impossible to know.

As of November 2013, 1.226 million jobs existed in the state, a 5.64% decline from the state's highest ever level of 1.299 million in March 2008 — or 73,564 fewer jobs. Scoggins said while everyone would like to see those jobs return, the sluggish recovery taking place across many sections of Arkansas is simply "a jobless recovery."

"A lot of the projects that we're working have smaller numbers associated with them because people are having to make such efficiency moves that require more automation and that sort of thing associated with them. So I'm guessing that because of the employment base drop, some people left the workforce or some people even moved for the workforce, so it's going to be hard to pull them back in. I think that what we're going to end up focusing on probably is not so much growing the workforce as it is shrinking that unemployment rate."

The most recent jobless numbers in Arkansas show an unemployment rate of 7.4% in December 2013, up from 7.1% at the same time a year earlier. The unemployment rate statewide was as high was 7.9% in 2011.

AEDC Commissioner Chester Koprovic, a Fort Smith native whose background is in manufacturing, said changes in the economy over the years has shown a movement away from manufacturing jobs. He said that shift also is reflected on the membership of the commission.

"When I first went on the commission, probably the majority of it was manufacturers. And I'm one of the few manufacturers left on the commission. A lot of them are developers, attorneys, finance people, but everyone brings their own perspective on what economic developments all about. So it's a really good mix,” Koprovic explained.

And while he and the rest of the commission are bound by confidentiality agreements about any closed door business it conducts, he said the Fort Smith region should be encouraged by the work AEDC has done on the region's behalf.

"Yes, there has been some talk about some different growth in Fort Smith. Some of it's going to happen fairly soon."

Fort Smith Mayor Sandy Sanders, who attended an AEDC reception at Chateau on the Greens in Greenwood Wednesday night (Feb. 12), confirmed what Koprovic had said.

"We're anticipating hopefully an announcement in the next couple of weeks of some new jobs in Fort Smith. An existing company adding some jobs," he said.

AEDC meetings will continue in Greenwood Thursday (Feb. 13) at Greenwood City Hall, located at 30 Bell Road. The meetings will begin at 8:15 a.m. with breakfast and a general meeting, followed by a closed to the public bond guaranty committee meeting at 8:30, an open to the public executive committee meeting at 10:30 and lunch at 11:30.

The nation’s foreclosure market continued to shrink in January, posting 40 consecutive months of declines on an annual basis, according to Calif., based RealtyTrac. Arkansas foreclosure filings were down more than 41%.

There were 124,419 foreclosure filings across the country last month, down 18% from a year ago. One in every 1,058 U.S. households had a foreclosure filing in January. 

Statewide there were 594 properties with a foreclosure filing last month, down 41.5% from the prior year. Northwest Arkansas and the Fort Smith metro area each posted lower filings year-over-year.

In Benton County there were 85 new filings, 33 of those were half way through the pipeline and slated for trustee sale, while another 55 were listed as bank-owned properties. Total filings declined 29.7% from January in 2013.

Washington County reported 35 new filings last month, the majority of those (25) were notices of trustee sale, while 10 others were bank-owned properties. Foreclosure activity is down 63.9% year-over-year, according to RealtyTrac.

Crawford County reported 15 new filings in January. All but four of those were notices of trustee sale. Total foreclosure activity fell 48% in January, when compared to year-ago period.

Sebastian County was a near mirror image of its neighboring county with 19 new foreclosure filings, with all but four being properties halfway through the lengthy foreclosure process. In the Fort Smith area foreclosures are 40% from a year ago.

Jim Long, an agent with Crye-Leike Realty in Northwest Arkansas, said there were 301 foreclosure properties listed for sale in the multiple listing service which includes all four counties in this report. He said the winter weather in recent weeks has cut down on the number of showings. The foreclosure properties declined from 322 reported in December.

The number of local foreclosure properties peaked at 373 in August of last year and has steadily declined each month.

One interesting note in the RealtyTrac report was the increase in new filings from December 2013. Statewide the number of filings rose 20% from December to January. Benton County posted a 60% increase month-over-month, while filings rose 128% in Washington County. 

Crawford County filings rose 15% month-over-month, while filings in Sebastian County were down 5% from December to January.

“The monthly increase in January foreclosure activity was somewhat expected after a holiday lull, but the sharp annual increases in some states shows that many states are not completely out of the woods when it comes to cleaning up the wreckage of the housing bust,” Daren Blomquist, vice president at RealtyTrac, said in the report.

A recent report to Congress (Jan. 24) indicates that there is active mortgage loan modifications being made to help stem foreclosures.

As of Dec. 31, there were 894,410 active permanent modifications granted through the Home Affordable Modification Program (HAMP Tier 1). About 88% of those modifications will have a rate increase after 5 years. The median payment increase after all rate increases will be around $200 per month, according the analysis of Treasury’s HAMP data.

Analysts believe some homeowners will be vulnerable to foreclosure when the rate resets. Of the 894,410 modifications, 28% have redefaulted on the mortgages and fell at least three months behind. In Arkansas there were 1,825 homeowners with active modifications, and 81% of those are subject to payment increases within five years of their original modification.

Treasury reported that of the homeowners with redefaulted loans, 27% of homeowners who redefaulted received an alternative modification, usually a private sector modification; 21% of homeowners moved into the foreclosure process; and 12% of homeowners lost their home via a short sale or deed-in-lieu of foreclosure.

Also, as of Nov. 30, there were 97,315 homeowners (11% of active HAMP permanent modifications) who had missed one to two monthly mortgage payments and are at risk of redefaulting out of the program.

Four months after declaring he would not seek a third term in Congress, U.S. Rep. Tim Griffin, R-Little Rock, said he will run for Arkansas Lt. Governor, joining a crowded field of Republican candidates.

Griffin, who was first elected to Congress in 2010 and serves on the powerful House Ways and Means Committee, said last October that he had “made no decision as to my plans after Congress except that I will continue in public service, including as a Lieutenant Colonel in the Army Reserve.”

Last week, Griffin confirmed that he had been approached about running for the Lt. Governor’s post and on Thursday (Feb. 13), he confirmed the decision to run.

“Last year, I announced my decision not to seek re-election to Congress when my term ends. The decision to leave Congress and return home was an agonizing decision but the right one for my young family. Since that announcement, I have been urged to continue public service, and I am humbled and honored at the encouragement I have received from all over our wonderful State. After much prayer, thought and discussion with my wife and family, I have decided to seek the office of Lieutenant Governor which will allow me to continue serving Arkansans as a problem solver and watch my 3-year old and 6-year old grow up at our home in Arkansas,” said Griffin.

The official news was first reported in the Arkansas Democrat-Gazette.

“As Lieutenant Governor, one, I will work to restore trust by reforming the office and saving hardworking taxpayer dollars. Two, I will use my experience, knowledge and relationships to help Arkansas compete and grow jobs. And three, I will serve as a resource for the Governor and Legislature to help move Arkansas forward,” he said.

On Wednesday, Rep. Debra Hobbs, R-Rogers, said she too would run for Lt. Governor, pivoting out of the Governor’s race to which she previously had committed. Reps. Charlie Collins, R-Fayetteville, and Andy Mayberry, R-Hensley, have also stated their intentions to run for Lt. Governor, although Collins has said he may re-evalute his decision.

A spokesman for businessman John Burkhalter, the only declared Democrat to announce for the Lt. Governor’s post, issued a statement regarding Griffin’s entry that suggested a general election campaign had already begun.

“While Congressman Griffin is simply looking for his next job in politics, Arkansans are looking for good-paying jobs, the best possible education for our children and workforce, and lower taxes on our families,” said Burkhalter spokesman Bryan Griffith. “The last thing Arkansas needs is another Washington politician like Tim Griffin bringing his record of divisive politics, dysfunction, and gridlock to Arkansas. As a successful entrepreneur and small business owner, John Burkhalter has spent his career creating jobs and businesses, giving back to his state, and working to build a brighter future for all Arkansans. John is the type of positive, forward-thinking and commonsense leader Arkansas needs as Lieutenant Governor.”

Griffin’s entry in the GOP field establishes him as a frontrunner for his party’s nomination. Griffin brings name identification and a healthy donor list to a race that typically struggles to raise funds.

The Lt. Governor’s office is a part-time job. The position presides over the Arkansas State Senate when the General Assembly is in session and serves as acting Governor should the Governor be incapacitated or leave the state.

The state’s previous Lt. Governor, Republican Mark Darr, resigned in January after an ethics controversy that resulted in a $11,000 fine being levied against him. Darr was pressured to resign from the office or face possible impeachment during the current legislative fiscal session.

Griffin said he would reduce the staff of the office and not ask for Arkansas State Police transportation, which is allowed under state law. He said he would also use his “experience, knowledge and relationships” to help with job creation and in navigating the federal government.

He said Lisenne Rockefeller, wife of former Lt. Governor Win Rockefeller, would serve as his campaign chair.

Consumers pulled back on post-holiday shopping and spending in the beginning of the year with severe winter weather in much of the country partially to blame, according to a report from the National Retail Federation.

The trade group reports January retail sales, excluding automobiles, gas stations and restaurants, were seasonally flat month-to-month, but sales rose 3% on an adjusted basis year-over-year.

“Following a solid holiday sales season, it seems that many consumers decided to take a break from the stores and shopping malls this January in an attempt to avoid winter weather,” NRF President and CEO Matthew Shay said in the statement. “While the dip in retail sales was somewhat anticipated, it is concerning that both jobless claims came in above projections and that consumer spending were flat in January – it’s not the way to kick off a new year.”

Congress did increase the debt ceiling this week, but Shay said more is needed to spur consumer confidence and spending, which is closely tied to employment data and economic opportunity.

The U.S. Census Bureau also released its January sales data, which includes automobiles, gasoline stations, and restaurants. The Census data indicates a 0.4% decrease in January sales on a seasonally adjusted month-to-month basis. Sales rose 2.6% adjusted year-over-year.

“Harsh winter weather is masking the performance of the broader economy,” NRF Chief Economist Jack Kleinhenz said. “Extreme temperatures and severe ice and snow are making it increasingly difficult to assess if the retail sales slowdown is temporary or a telling sign of a longer lasting weakness in the consumer-fueled economy. No one can jump to any solid conclusion until we shovel out of the snow.”

Earlier this month, NRF forecast a 4.1% increase in retail sales in 2014.

Other findings from the January retail sales report (year-over-year) include:
• Building material and garden equipment sales increased 3.3%.
• Clothing and accessory sales increased 1.4%.
• Electronics and appliance sales decreased 4.9%.
• Furniture and home furnishing sales decreased 2.1%.
• General merchandise sales increased 1.4%.
• Health and personal care sales increased 3.1%.
• Online sales increased 6.5%.
• Sporting goods, hobby, book and music sales decreased 1.5%.

A relatively higher price and the continued production of natural gas from existing wells resulted in a record of $62.685 million in Arkansas’ gross natural gas severance tax revenue during 2013. The tally was up more than 53% compared to 2012 collections and up more than 6.4% over the previous high set in 2011.

Also, a recent report from the Bureau of Economic Geology at the University of Texas says Arkansas’ Fayetteville Shale Play will produce natural gas out to 2050, but production in the Play could decline beyond 2015 if natural gas prices remain low.

Even with 80% fewer active rigs in Arkansas compared to the boom days of 2008, a wellhead price flirting with $5 per MCF – the price recently hit $4.824 MCF according to the federal Energy Information Administration – is supporting demand for natural gas produced in Arkansas, said Kelly Robbins, executive vice president of the Arkansas Independent Producers & Royalty Owners.

The winter weather and the continued growth in liquified natural gas (LNG) exports also is supporting the recent price increases in natural gas, Robbins said.

“The colder weather has obviously created greater demand, which as we know, whether for natural gas or widgets, will generally always increase the market value. This coupled with new or increased demands such as exportation of Liquefied Natural Gas (LNG) to other countries, increased usage of natural gas for the production of electricity, and even closer to home, the expansion of Compressed Natural Gas (CNG) stations via a state rebate program that will hopefully help encourage the building of up to 6 stations” in Arkansas, Robbins said in a note to The City Wire.

The U.S. Department of Energy has authorized energy companies to export up to 8.5 billion cubic feet per day of LNG to non-free-trade partners. That represents about 13% of daily LNG production.

RECENT TAX HISTORY
In 2009, the first year of the severance tax hike, Arkansas joined the list of the nation’s top marketed natural gas producers when sales of Arkansas natural gas spiked 57.5% to 690 billion cubic feet (Bcf). Arkansas natural gas sales rose another 36.1% to 939 Bcf of annual production in 2010, according to figures from the Arkansas Department of Finance and Administration and the federal Energy Information Administration.

A portion of the severance tax collections since 2009 are used for road and other infrastructure support in the counties seeing the increased natural gas production.
With production in Arkansas’ Fayetteville Shale Play diminished in the past few years, the price of natural gas does have more of an impact on severance tax collection levels.

In 2005 the price approached $15 per million BTU, which began a push by producers to use fracking and other innovative and unconventional drilling methods to find and produce natural gas.

But activity in the Fayetteville Shale Play – located in north and central Arkansas – began to diminish in recent years as the price dropped and as other gas plays emerged that produced a “wet” natural gas. Arkansas’ natural gas is dryer, meaning fewer products can be refined from the raw commodity. A wet natural gas may also be associated with areas in which oil is present, which presents a richer target for energy companies.

Robbins said there are about 12 rigs active in Arkansas, with 8 to 9 operating in the Fayetteville Play. That is compared to more than 55 rigs about six years ago, and down from 22 just two years ago. The monthly average for natural gas rigs in Arkansas during 2010 was 39.

However, the energy sector in Arkansas recovered in 2013 from a big drop in revenue in 2012. Following are the past five years of gross severance tax collections in Arkansas.
2013: $62.685 million
2012: $40.96 million
2011: $58.905 million
2010: $54.485 million
2009: $27.725 million (partial year of collections)

In 2008, the year before the severance tax was increased, collections were $1.314 million.

FUTURE PRODUCTION
Prospects for 2014 look promising with respect to staying at 2013 levels for the natural gas industry in Arkansas. Houston-based Southwestern Energy, one of the largest players in the region, expects production from the Fayetteville Shale Play to be “essentially flat” in 2014 compared to 2013.

“In the Fayetteville Shale, our well performance continues to improve, evidenced by a well we recently placed on production at over 12 MMcf per day, and our efficiencies created by our vertical integration are also expected to continue to improve keeping our well costs low,” noted a Dec. 10, 2013, company report on guidance for 2014.

The company plans to make capital investments of $900 million in the Fayetteville Shale Play during 2014, or almost 39% of the company’s combined $2.325 billion in capital investments in 2014. The company projects between 460-470 gross operational wells in the Fayetteville Play during 2014, just above the 441 in 2013.

The University of Texas report, issued in January, predicts the Fayetteville Shale Play will deliver 18 trillion cubic feet (TCF) of “economically recoverable reserves” by 2050, with production declining from about 950 billion cubic feet (BCF) a year to around 400 BCF by 2030. The report indicates there may be 38 TCF of “technically recoverable” natural gas, but notes that not all gas reserves make economic sense to produce.

However, without a gain in the price of natural gas, production in the Fayetteville Shale Play is predicted to moderate.

“In the pricing scenario of $4/mcf natural gas, production from the Fayetteville Shale reaches a plateau during the period of 2012-2015 and begins a gradual decline as the annual well count decreases,” according to the UT report.

Rep. Charlie Collins, R-Fayetteville, gave no indication Saturday (Feb. 8) when he spoke to The City Wire that he was looking to exit the race for lieutenant governor, but that is exactly what he did Thursday (Feb. 13) following the announcement of U.S. Rep. Tim Griffin, R-Little Rock, that he would run for the office.

Instead of seeking the open seat, which was vacated when Lt. Gov. Mark Darr resigned from the office Feb. 1 following an ethics scandal, Collins said he would seek re-election to his Fayetteville House seat.

The two-term representative said there was simply no way he could defeat Griffin, who announced months ago that he would retire from Congress in order to spend more time with his family in Arkansas.

"Congressman Griffin, a sitting congressman, has tremendous name recognition and access to resources," Collins said in a phone interview. "It makes sitting Congressman Tim Griffin a crystal clear favorite to win the Republican primary and also the general election, which is good for Republicans. Tim is smart, tenacious, and will make an excellent lieutenant governor for Arkansas."

It is a reversal from Saturday, when he was looking forward to the lieutenant governor's race, which would give him a "a statewide platform, (where) I can help build and champion and get more support for this message of economic freedom (and) making our state more competitive with the states around us."

As for what will happen to any of the money already contributed to Collins' lieutenant governor bid, he said he would like to use the funds for his House re-election effort, but would leave that up to donors.

"I'm going to talk to those people who contributed to my campaign and if they agree, I'll use (the funds) in my state representative race. If they want a refund, I will refund on a pro-rated basis on what I've spent so far. It will be up to the person who donated (what I do with the money)."

The shakeup in the lieutenant governor's race comes a day after Rep. Debra Hobbs, R-Rogers, announced her switch from the race for governor to the race for lieutenant governor. In addition to Hobbs and Griffin, Rep. Andy Mayberry, R-Hensley, is seeking the GOP nomination. Democrat John Burkhalter is currently his party's only candidate.

Five women in Van Buren went on dates with seven different men Thursday night (Feb. 13).

While it may seem improbable, it's exactly what happened at the city's public library as it hosted its first ever speed dating event.

According to Library Assistant Amanda Coward of the Crawford County Library System, the event was a way to introduce local singles to each other while promoting the library at the same time.

"We noticed that it's hard to get the young adult age to come to the library, the 20s and 30s," she said.

In response to the lack of users in the younger demographic, Coward said she and CCLS employee Lily Clegg decided to create a community outreach event tied to some sort of holiday that would attract people to the event.

"And so the first holiday that came up was Valentine's Day and we thought speed dating would be a good way (to quickly meet a lot of people). We called it speed dating and speed friending, that way even if you're with someone, or if you just want to meet new people, (you can). There's not really a lot of places to meet new people. There's bars and stuff, but the library's always a good place."

To market the event, the library took advantage of several different marketing methods, including social media, flyers in restaurants and coffee shops as well as use of The City Wire Social, a weekly e-mail notifying subscribers about various events in the Fort Smith and Northwest Arkansas areas.

Once the 12 participants arrived at the library, the task was simple. The five women were seated at tables with the seven men moving from female to female at the sound of a timer. Various ice breaker questions were on printed cards at the tables to help get the conversation started, though many of the individuals found it easy to slide in and out of conversations as they moved from person to person.

Participant Leah Jenkins said she did not know what to expect with the event, but described it as fun once it concluded.

"It was fun. You had these cards, so you always had something to talk about when you couldn't think of it yourself and people moved after a certain time, so it never got awkward. It wasn't bad."

Jamie Narramore was another participant who said even previously living in a large city, he had never experienced speed dating until the event he attended Thursday.

"It was actually pretty cool," he said. "I got to talk to some cool people. Everybody was friendly. Everybody's in the same boat. I'm sure everybody was nervous."

While Narramore may have assumed everyone was nervous, he and others played it cool and did not display any nerves. As for why he participated, he said it was a way to meet people he would have not otherwise connected with.

"I just moved here from like San Francisco and I've only been here for a year and a half. I have not really met people," he said, adding that he had tried the bar scene but found it hard to connect given the fact that he does not drink.

Jenkins said she was excited to meet people outside of her group of friends, adding that it is hard to meet new people in a small town.

"Yeah, I got to talk to people and harass them, I guess," she joked. "I thought it would be interesting. I wanted to talk to people and get cupcakes. And I just thought it would be fun. I thought it would be interesting."

Whether any love connections were made at Thursday's event, participants will have to wait and see. Sheets filled out after each round asked participants to rate their "date." Coward said ratings will be tallied Friday (Feb. 14) with participants being notified by e-mail if there was a match between themselves and another participant, with both showing mutual interest among the following ratings — great, ok, or terrible.

While the event Thursday was small, Coward said response to the marketing for it was quite large from groups not necessarily targeted by the speed dating event, necessitating another event later this year.

"We're planning to have a summer fling for the 40s and up," she said. "Summer fling speed dating. We had two people come in tonight and say, 'Why can't the 40s and up do it?' They wanted to come. That totally shocked me."