A Freedom of Information Act (FOIA) lawsuit filed by blogger Matt Campbell took a twist this week that could spell trouble for Secretary of State Mark Martin.

Campbell filed a lawsuit in June to compel Martin’s office to comply with a document request. Martin’s office supplied some copies of the documents Campbell was seeking, but provided them in PDF format not in the original Word format in the request.

Martin, a Republican, and Campbell, who describes his blog as “unabashedly progressive, populist, and liberal” have a long history of antagonism regarding FOIA requests and ensuing spats over information disclosure.

A bigger problem could be a subsequent filing from Campbell this week alleging that Martin improperly hired outside legal counsel. Arkansas Code § 25-16-702 states:
“The Attorney General shall be the attorney for all state officials, departments, institutions, and agencies. Whenever any officer or department, institution, or agency of the state needs the services of an attorney, the matter shall be certified to the Attorney General for attention.”

The statute allows state officials to use outside counsel only if the Attorney General has declined to provide the legal representation after being asked in writing and after approval from the governor to do so. The attorney general’s office has confirmed that they were not asked to provide the legal services in this matter. The governor’s office also confirmed that have not been asked nor have they approved any use of outside counsel for Secretary Martin.

In the FOIA lawsuit, Martin used an attorney from Quattlebaum, Grooms, Tull & Burrow law firm in Little Rock to defend the office in the lawsuit, and it is not the first time the office has used outside counsel.

According to documents obtained by Campbell, he estimated that Martin’s office has spent over $100,000 on outside attorney fees in the fiscal year 2013 alone. One attorney used by the office includes Republican gubernatorial candidate Asa Hutchinson who represented the Secretary of State in a lawsuit challenging state legislative redistricting and over the rejection of a ballot title seeking to legalize casinos.

Arkansas Code § 25-16-702 (d) states:
"Any person violating the provisions of this section shall be subject to indictment and upon conviction fined in any sum not less than two hundred dollars ($200) nor more than two thousand dollars ($2,000) and, upon proper proceedings, removed from office.”

It appears the “proper proceedings” for removal in this section would refer to removal by impeachment or address by the governor under the Arkansas Constitution Section 15.

“When you think about this whole scheme, it makes perfect sense as to why a state official should be defended by the Attorney General,” writes Campbell on his blog. “A suit against a state official is not a suit against him personally, but a suit against the office he holds. So what is important is not that the official feel like he or she needs to ‘win’ the lawsuit, but that the State’s interests are protected. In this case, regardless of how Martin feels about the lawsuit or how badly he wants to be victorious, the State’s interests are case are seeing that the AFOIA is correctly interpreted and applied, that the AFOIA’s liberality of construction is maintained, and that no unnecessary costs are incurred by the State in defending against the lawsuit.”

Alex Reed, a spokesman for Martin, said it is office policy not to comment on pending litigation.

A plan under consideration by the Sebastian County Election Commission would reduce the number of polling sites in certain parts of the county and save costs, according to Election Coordinator Jerry Huff.

The plan would reduce various polling places with "polling centers," which would allow voters to vote at any one of the centers versus voting at a designated location, which is how elections are currently structured.

Should the county move to polling centers, only certain sections of the county would fall under the new centers. Locations that have been floated include Fort Smith, Greenwood and Lavaca.

In Fort Smith, the number of polling locations would be reduced from 24 polling places to a minimum of four polling centers, likely located within the city's pre-determined wards used for allocating the city's Board of Directors positions. Another option would add up to two additional polling centers, possibly at the former main branch of the Fort Smith Public Library, adjacent to the convention center with another possible location at East Side Baptist Church at the intersection of Massard Road and Dallas Street, according to Election Commission Chairman Lee Webb.

"We're mainly looking at really densely populated areas," Webb said. "We don't think there's anyway you could (do this county-wide), especially in the south part of the county."

In moving to a system, figures supplied by the Election Commission show estimated cost savings of $17,645 for the May 20, 2014, primary election and $18,550 for the Nov. 5, 2014, general election by moving both Fort Smith and Greenwood to polling centers. In all, the savings in both elections would be $36,195.

The savings comes from reducing the number of poll workers. Currently, the 24 polling places in Fort Smith average about six workers each, while Greenwood has three polling places with an average of six workers.

The four proposed Fort Smith polling centers, on the other hand, would be staffed by 13 workers at each location, while the one proposed polling center at the Greenwood Fairgrounds would be staffed by 11 workers. In all, the proposed sites would only employee 63 workers, while the current set up in both cities requires an average of 162 workers.

"It really helps to address the issue of workforce. The biggest problems you have with an election is coming up with enough poll workers and then you have to train them," Huff said.

Training poll workers can be a challenge, he said, as many poll workers are senior citizens who do the position out of duty to their community and country or because they are seeking social interaction. It is not very often that poll workers come into the position with advanced skills, such as computer knowledge needed to run electronic voting stations or submit electronic reports, Huff added.

In addition to saving money in the county budget by not having to pay as many poll workers, Huff also highlighted the cost savings that will be associated with not having to print paper ballots for polling centers.

"The paper ballot, you could not use paper ballots at these polling centers because a paper ballot memory card will only contain ten precints, so you would have to have eleven of these machines at each of these locations, which we don't have. So, you could not use paper ballots. You would have to use electronic machines," Huff said.

"In other words, it's a move toward fully electronic," Webb said.

The question of whether the county would have enough voting machines, Huff said, would be a moot point since so many polling places would close, therefore freeing up electronic machines to be used at the new polling centers.

County Clerk Sharon Brooks said the new system, if approved, would be beneficial to the county's bottom line, the process of counting votes and agreed with Webb's assertion that it would be a step toward going fully electronic across the county.

"Yes, it's a great thing," she said, adding that she hopes to start testing some of the new technology that would be required for polling places later this year.

Asked whether there was concern about voters being disenfranchised by reducing the numbers of polling places and possibly making it more difficult to vote, Webb said the city of Fort Smith already provided transportation for voters needing to vote on election day and would expand the service should the push to polling centers move forward.

"If we see that it won't work in a community, we don't have to do it," Webb added.

No action has been taken on the proposal, though Webb said a public comment period will take place at a later date.

House flipping is up 256% in Arkansas, but those involved in buying and renovating a home for a profit say the process is tough and risky in smaller metro areas.

RealtyTrac reports 136,184 single family home flips in the U.S. during the first six month of 2013. A flip is where a home is purchased and subsequently sold again within six months. Nationwide home flips rose 19% in the first half of 2013, compared to a year ago, and they were up 74% from the first half of 2011.

Arkansas reported 923 flips this year, up 256% from a year ago.

The results in Arkansas counties did not gather that much steam, but Pulaski County did make the top 40 metro areas with 245 flips recorded in the first half of this year. Flip activity there rose 195% from the same period in 2012, according to RealtyTrac.

Benton County reported 109 home flips in the six-month period, up 8% from the same time in 2012. However, activity is down from 151 flips recorded in the same period of 2011. Washington County showed 7 flips this year, down from 11 reported a year ago and 38 recorded in the first half of 2011.

Sebastian County had 2 flips so far this year, falling from 5 in the same period of last year and 14 recorded in the first half of 2011. Crawford County also showed 2 flips, but that was an increase from zero recorded in the same period of 2012, according to RealtyTrac.

“While flipping continues to be profitable in most markets, particularly those where the home price recovery is still nascent and a recent rebound in foreclosure activity allows investors to find distressed inventory at a discount, home flipping is tapering off in markets where fewer of those distressed bargains are available,” said Daren Blomquist, vice president at RealtyTrac.

He said about a third of the 100 markets analyzed by RealtyTrac had declining flip numbers. Some of those include longtime perennial hot spots such as
Las Vegas, Phoenix, Southern California and Atlanta.

Blomquist said flipping remains on the rise in more than two-thirds of the markets, including New York, Washington, D.C., Chicago and several Florida metros.

PROFITS VARY
Mike Maxwell, an agent with Crye-Leike Real Estate in Bentonville, said he flips a couple of homes a year and there is no perfect formula for success.

The key to profitability often lies in the price paid, he said. Classic rookie mistakes by investors often include paying too much for the property and underestimating the cost of repairs and the timeline needed for a successful flip.

“In this market, investors need to allow six months to move the home, and that doesn’t necessarily include the renovation timeline,” Maxwell said.

He said a home bought at $100,000, in need of $20,000 in repairs, should bring a sales price of $155,000 to make money for the investor after marketing costs.

“Investors need to know most of the time their investment is tied up in the cost of repairs and carrying costs until that property is sold, or refinanced and kept as a rental. That can be several months,” he said.

Grant Morris of Fort Smith knows how long it can take to complete a house flip in smaller markets. In April 2010, Morris and his wife Lindsey purchased a home with a partner Kevin Childers. It took them 16 months to complete the extensive renovations, most of which they did themselves.

“We spent $20,000 in total renovations and put the home on the market in September of  2011 and it sold in May 2012. It was a two-year commitment for us,” Morris said.

He said given the time commitment of the project, he doesn’t think the partners were justly compensated based on the sales price.

“In my opinion the formula to flip homes the right way is: Buy low, hire the time-consuming work out (staying within budget), remodel as cheap and as fast as you can, remodel to the surrounding neighborhood (don't over do it) and get it back on the market for quick sale,” Morris said.

Nationwide, investors fared quite well with an average profit of $18,391, a 9% gross return over the purchase price.

Investors in Benton County got an 11% return over investment with a flipped price of $114,928, up $10,652 over the average purchase price in the first six months. In Crawford County, the average flip price was $6,645 lower than the purchase amount in the two flips recorded this year. The average purchase price in Sebastian County was $136,500 and the sales price was $121,000, an average net loss of 11%. In Washington County, home flippers lost an average of $7,614 per deal. The average purchase price was $112,614 and the flips averaged $105,000.

Blomquist said nationwide investors who flipped during the first half of the year benefited from buying homes a discount of 5% and then getting a 1% premium sales price over market value.

Maxwell said it’s hard to do in smaller markets like Northwest Arkansas or Fort Smith.

“When the foreclosures dried up in recent years its been very difficult to pull off. But now that bank-owned properties are starting to come back into the market there should be a few more deals available,” he added.

WORDS OF ADVICE
Morris and Maxwell said home inspections are a must and the $400 is small compared to thousands of dollars that could be spent from rot or termites.

“We had to completely gut the kitchen and bathrooms even taking out subfloors, which added to our timeline and costs,” Morris said.

Maxwell said most foreclosures are bought “as is” but a home inspection is still a good idea because the last thing a flipper needs is a costly surprise to derail his budget and his timeline. Maxwell has a contractor’s background so he does a lot of the work himself on the flips he completes.

Morris said looking back he would hire out as much as he could afford to do and still make a profit.

“We would have made about the same amount of money and been done approximately a year sooner if we would have hired the work out,” he said.

Maxwell and Morris said another classic mistake is to overdo the renovations.

“You have to remember that this is not your home, stick to neutral colors and keep the finishes within budget or you will see your profits slip away,” Maxwell said.

Morris urges prospective investors to keep the renovations within the scope of the rest of the neighborhood.

“We would like to flip again in the future, if the opportunity is right,” he said.

With a June jobless rate of 7.3%, Arkansas was one of six U.S. states to not see a jobless rate change compared to June 2012. Year-over-year jobless rate decreases were posted in 37 states.

Although the jobless rate remained the same compared to June 2012, the size of Arkansas’ labor force fell 1.67%, and the number of employed fell by an estimated 20,949, or down 1.66%.

The number of employed in Arkansas during June was 1.234 million, down compared to the 1.255 million in June 2012, according to a Friday (July 19) report from the U.S. Bureau of Labor Statistics.

The number of unemployed fell from 99,352 in June 2012 to an estimated 97,667 in June 2013. The number of unemployed increased by an estimated 628 between May and June.

The workforce size shrank from an estimated 1.354 million in June 2012 to 1.332 million in June.

Arkansas’ annual average jobless rate fell from 7.9% during 2011 to 7.3% during 2012.

ARKANSAS SECTOR NUMBERS
In the Trade, Transportation and Utilities sector — Arkansas’ largest job sector — employment during June was an estimated 251,500, down 1,400 from the May number and ahead of the 241,000 during June 2012.

Manufacturing jobs in Arkansas during June totaled 154,300, down from the 154,400 in May and below the 155,700 in June 2012. Employment in the manufacturing sector fell in 2012 to levels not seen since early 1968. Peak employment in the sector was 247,300 in February 1995.

Government job employment during June was 214,900, up from 214,700 in May and below the 216,000 during June 2012.

The state’s Education and Health Services sector during June had 174,400 jobs, down from the 174,900 during May and up from 170,700 during June 2012. Employment in the sector is up more than 20% compared to June 2003.

Arkansas’ tourism sector (leisure & hospitality) employed 102,500 during June, up from the 102,300 during May and slightly less than the 102,600 during June 2012. At a revised 103,700, January 2013 marked a new employment high in the sector.

NATIONAL DATA
The BLS report also noted that 37 states had unemployment rate decreases from a year earlier, seven states had increases, and six states had no change. The national jobless rate was unchanged from May at 7.6%, and was down from the 8.2% in June 2012.

Nevada had the highest unemployment rate among the states in June at 9.6%. The next highest rates were in Illinois and Mississippi, 9.2% and 9%, respectively. North Dakota again had the lowest jobless rate, 3.1%.

The June jobless rate in Oklahoma was 5.2%, up from 5.1% in May and unchanged compared to June 2012.

Missouri’s jobless rate during June was 6.9%, up from 6.8% in May but below the 7% in June 2012.

How large of a gap do Arkansas public schools have in broadband access? The gap in bandwidth may be as large as the gap in communication between state educators and Internet service providers, but both are likely to close quickly.

“I think there’s just this huge ravine of communication between the providers in our state and our school people and DIS [Department of Information Services] and us,” said Arkansas Education Commissioner Tom Kimbrell.

Last week, Gov. Mike Beebe (D) convened a group of leaders representing Internet service providers (ISPs), political and educational representatives, and members of the state’s business elite to discuss the subject. The outcome of the conclave was a business-focused group named FASTER (Fast Access for Students, Teachers and Economic Results) and an education-centered task force (the Quality Digital Learning Study committee) charged by the legislature to address the issue of Arkansas’ public school bandwidth shortcomings.

Education leaders are concerned that the state’s schools are woefully deficient in broadband access. According to DIS, only a handful of the state’s public schools may have a nationally recommended broadband capability of 100 Mbps per 1,000 students and staff. The average Arkansas school district with 1,800 students currently has 40 Mbps of bandwidth and needs at least 140 Mbps more, the department concluded.

Industry officials contend the DIS map does not represent the true condition of the state’s broadband capabilities.

The FASTER group has already met a second time and there is a sense among educators and providers that a solution may be fashioned in quick order. The first priority, however, is working with accurate data.

“I think the need for accurate, better data needs to be priority one with all of the task forces right now,” says Cox Communications director of government affairs Len Pitcock, who serves on the QDLS committee. “The data to a large degree that’s being used that indicates there are some problems is based on what the districts are operating on today, not what’s available to them.”

Pitcock is quick to point out that he’s complimentary of the latest efforts and is encouraged by his company and the industry’s goal of being part of the solution. So is AT&T’ Arkansas President Ed Drilling, who serves on the FASTER panel.

“I do think there is a little bit of a disconnect,” Drilling says. “There is a lot more fiber, a lot more bandwidth capability in the state.  It looks like there’s this deficit – and there is in terms of what’s being delivered to the schools – but I don’t think in all cases it’s a matter of lack of infrastructure. I think it’s just a matter of putting the components together and people making sure they let the providers know what speeds that they want and us getting together and communicating directly that this is available and doable.”

Pitcock and Drilling note that while some bandwidth activation will be simple to achieve because the infrastructure is already in place, there will be impediments in certain areas of the state.

Parts of Arkansas have limited broadband access due to low population, which makes it unfeasible for private industry to earn a return on its investment.  Subsidizing service in these areas is likely the only solution for funding bandwidth expansion.

Geography can be a challenge in other areas where mountainous terrain doesn’t allow for lower cost broadband deployment and it can be expensive to lay fiber in the ground.

Arcane restrictions on dedicated broadband funding sources also can limit the number of competitors in a region of the state or curtail the list of Internet providers capable of accessing monies.

“If you’re talking about taking last mile broadband to Snowball, Arkansas or to Deer, Arkansas, especially if you’re going to use government funds, it seems like there ought to be a competitive element to that as opposed to just defaulting to the incumbent phone company to have exclusive access to those monies,” Pitcock noted.

Drilling says that once a broadband map is updated to reflect Internet service providers’ capabilities – which he feels will be done rapidly – the debate will shift to how to get schools what they need and what the price tag might be from private industry, public schools and possibly the state.

“I think it’s a good opportunity for us to look at this from a comprehensive standpoint and coming up with something other than a piecemeal or band aid approach,” he said. “We can come up with some good long-term solutions – and mid-term and short-term solutions – to help the kids in this state.”

Pitcock agrees.

“One home, one school without access is one too many, but at the same time I think we also have to recognize that there have been billions of dollars invested – most of it private capital – to get it out to the overwhelming majority of Arkansans today.”

A federal government program known as E-rate 2.0 may offer a funding solution. The Federal Communications Commission program subsidizes school and library phone and Internet service by as much as 90% of costs.

THE DRIVER
Education Commissioner Kimbrell says that meeting testing requirements for new Common Core standards is part of what’s driving the bandwidth debate, but the problem extends far beyond this one element.

“It is true that’s what’s brought it to the forefront because we have some timelines, but what really has happened over the last four years, and before that, is a lot of conversations about how we use today’s technology – knowing that tomorrow’s technology will be upon us in no time – to use innovative tools of today with our students. How do we get those tools accessible to our teachers, so they can use them effectively to communicate with today’s learners?” Kimbrell said.

He is hoping for a private-public partnership that will provide 100% broadband coverage at the levels needed to the state’s school children. If the private sector can’t cover its costs in certain areas, Kimbrell says alternatives, such as tying on to higher education’s ARE-ON network, should be considered.

He understands that all of this effort may have a steep price tag. Some have lowballed the cost at $17 million, while others have estimated it as high as $765 million.

“Our first priority and our goal is to work out a private-public partnership in which we’re providing adequate bandwidth to every school, and private industry is not losing out because of it and our public schools and our students are not losing out because of pricing. We want to work out a situation that’s a win-win for everybody,” Kimbrell said.

He’s hoping that all of the working groups can complete their studies by December of this year in order to present the findings to the Governor and Arkansas General Assembly before next year’s legislative fiscal session.

Kimbrell also said that the investments he hopes to see in broadband could be transformative for the state’s education system. He doesn’t see the payoff from bandwidth expansion taking a generation to appear in better educated kids; he thinks the results will be immediate.

“I think in reality we could get there really, really quick,” he said.

Fort Smith city leaders met this weekend at the resort at Mount Magazine, near Paris, for a two day retreat. The retreat, which took place on Friday and Saturday, was meant to allow city directors the time to discuss goals and plans for the city in coming years.

Directors, along with City Administrator Ray Gosack and Mayor Sandy Sanders, were asked to provide their "thoughts on the retreat and your takeaways from the event? Positives, negatives, ideas for how the city and the Board will move forward not just this year, but in years to come, and any new big picture ideas that were brought up during the trip."

Responses were received from Directors Mike Lorenz, Philip Merry and Kevin Settle. Director George Catsavis was unable to attend the weekend retreat.

• Director Mike Lorenz
"The discussion was great and the retreat was a great success in my opinion. We made great progress as a team and moved toward realizing a unified vision that will carry Fort Smith into the next decade after identifying a broad list of goals that we plan to narrow down into actionable items in the coming weeks/months. It definitely exceeded my expectations!"

• Director Philip Merry
"The retreat was very productive and I feel it was time very well spent by all participants. There are many ideas that came up that Mr. Gosack and his team will be studying and analyzing for our board, from a cost- to- implement and viability standpoint. Additionally, other ideas were tabled until the completion of the citizens comprehensive steering committee’s work and recommendations therewith are achieved.

"Some of the topics addressed range from the need to embrace and market our history and our heritage to emphasizing our workplace toward younger professional entrepreneur types. Completion of the riverfront, the channelling of our Arkansas River,  the completion of I-49 and subsequent infrastructure needs that will emerge, emphasis on citizen engagement, citizen service improvement, youth activities, implementation of special computer applications that will better facilitate communications with our citizens, and more….. highlighted our talks and planning. JOBS, JOBS, JOBS is so important and we continued to explore what we can do to assist from the governance side of the jobs recruitment/creation process.

"Goals/desired outcomes along with the various means by which we can achieve same were discussed and analyzed with an eye toward improving our board’s representation of the 86,000 citizens that we represent and serve.

"I know that shortly city hall will be publishing the entire list of topics covered at the retreat. Mr. Ron Holifield who led the proceedings did quite well in keeping the meeting in rhythm and with full participant engagement. His many years of city government/professional experience and familiarity with our city’s strengths and challenges are so helpful.

"I look forward to the times ahead when the implement phase in our work toward achieving our goals can begin. The goals and desired outcomes will be printed and will be in our midst ongoing and will be displayed at every meeting for any and all to see. To do so will enhance our steadfast commitment to achieve and the measurement of it all.

"It was a pleasure to network with the other board members, our City Manager, Assistant City Manager, City Clerk."

• Director Kevin Settle
"Over the 2 day retreat, we worked on many goals and priorities for the city and our future. The retreat allowed us to work together for the betterment of our city.

"We looked at how to make our city more attractive that would help keep existing jobs, while attracting new jobs.
 
"Some of the items discussed over the 2 day event:
• Look at the possibility of annexation of I-49 and 71south.
• Youth activities and the needs of our community, which might include a sports council as part of the park commission
• Riverfront development enhancements, which could include a redevelopment zoning around the old furniture district;
• Extending Spradling Avenue to Riverfront Drive;
• Look at how to put in a improvement district on Midland Avenue;
• How to improve the city overall appearance;
• Look at new technologies that will help with better communication with the our citizens; and
• Continue to focus efforts on Arkansas River 12-foot channel, Chaffee Crossing developments, comprehensive plan update, completion of I-49, and public safety.

"We have asked the administration to look over our list and give us ideas on cost and time to implement. The Board of Directors will come back and put a priority on the items and discussed how we go forward.

"Overall, the retreat was a success for the future of our city, which will have a great impact on us in the many years to come."

A growing number of regulations, a decreasing number of skilled workers and slow regional economic growth are just some of the issues challenging area homebuilders, according to Dave Hughes, executive director of the Greater Fort Smith Association of Home Builders.

That said, the association that was formed in 1955 has been a leading organization nationwide in the promotion of quality housing. The association is one of very few that still conducts two parade of homes events each year. Just a few years ago, the association was recognized nationally for 25 consecutive years of constructing and selling a showcase home.

“No other organization like ours, anywhere in the country, has done that for that long,” Hughes said.

The association today has 154 member companies who employ at least 8,500 people in the region, with most of those in Crawford and Sebastian counties.

According to Hughes, a majority of housing related businesses in the region have remained in business despite an almost 40% drop in home sales between 2006 through May 2013.

“The good news is, most builders and suppliers did not go out of business. ... It’s not been easy, but they’ve found ways to stay in business,” Hughes explained. “Most of our members are locally owned, and so they are invested in the community and they want to see it grow. ... At the end of the day, all a builder really has is his reputation, so they work hard to protect that.”

Hughes said the effort to stay in business becomes more difficult every year as the industry faces more federal and state rules. Most of the rules that Hughes says are “overreaching” deal with energy efficiency and building codes that go beyond “common sense.”

“To an extent and for public safety, you have to have good codes for safety standards and fire standards. But we’re approaching what I think is a tipping point with overreaching federal regs that are pushed down through state and local governments,” Hughes said.

With new energy efficiency rules mandating the types of windows, insulation, plumbing and other housing materials, the cost/benefit ratio soon gets out of whack, according to Hughes.

“The bottom line is that it will cost more to build a home ... and so you price families out of new homes and they stay in older homes or stay in apartments that” are much less energy efficient than homes built under older energy efficiency rules, Hughes said.

“So if your goal is to improve efficiency, but you price everyone out of the market, then what have you gained? Nothing,” Hughes said.

The local association is also working with the National Association of Home Builders to oppose efforts to reduce or eliminate the mortgage interest deduction.
www.nahb.org/

“They’ve (Congress) been trying to cut that for years, but it does help stimulate the market. I would think that, with the economy finally showing some life because of a better housing market, I would think they wouldn’t want to mess with that right now,” Hughes said.

Something else that would stimulate the industry would be a return of skilled trades training. Hughes said over the years there has been less instruction available for skills required by the housing industry because of the greater focus on college degrees. He argues with those who say a college degree is the best path to a good job.

“That’s not true. Call a psychiatrist the next time your toilet stops up. ... Look, we have a real dearth in incoming skilled trades people. It’s not just here in our area, it’s everywhere,” Hughes said.

He recently spoke to a group of high school students and encouraged them to consider the benefits of a skilled trade.

“I essentially told them, ‘Not all of you may finish college, but that doesn’t mean you won’t be successful,’” Hughes said of his remarks to the students.

In addition to a skilled workforce, Hughes said the Fort Smith regional housing market also needs more higher-paying jobs in the area. He realizes the manufacturing sector is not likely to return to its glory days, but an economy of service sector jobs is not good for the industry.

“Well, for starters, more jobs created than we’re losing,” Hughes said when asked what would provide more stability to the local housing sector. “Specifically, what we need are those $20-an-hour jobs that we had when manufacturing was so stable for so long.”

Going back to school can be challenging after a few years sitting on the sidelines, whether it is due to a career, a new family or other reasons.

But a program that starts today (July 22) at Chaffee Crossing seeks to make the transition from the military to the classroom easier for veterans.

Veterans Upward Bound is a program that "prepares veterans for college, whether it is a university, community college or technical-vocational school," according to Janelle Bollman, director of VUB at the University of Arkansas in Fayetteville.

The program, which came to the Fayetteville campus in 1993, has seen more than 2,200 veterans take part, helping them to gain the skills in various subjects to be successful in pursuing a higher education, according to Assistant Director of VUB Mark Stypinski.

He said a grant from the United States Department of Education enables the program to serve veterans across five counties. The program, Stypinski said, was thriving in Washington County, with sites at the Veterans Administration Hospital and the University of Arkansas, though many veterans in Crawford and Sebastian Counties were well served by the program.

That will change thanks to a partnership with the non-profit Camp Hope for Heroes at Chaffee Crossing, whose facilities adjacent to Fort Chaffee are being used to help students improve their academic skills in subjects ranging from math and science to reading and writing or a foreign language.

Bollman said the building, located at 7320 Mahogany Drive, was donated for use free of charge by the Fort Chaffee Redevelopment Authority. Should VUB outgrow the facilities provided by Camp Hope for Heroes and the FCRA, she said officials with the Fort Chaffee Maneuver Training Center have agreed to let facilities at the military training installation be used.

There is a computer lab set up for 10 individuals, though it has a maximum capacity of 15, according to Bollman, meaning veterans can get the one-on-one attention they need while preparing for the next step in their academic journey.

"Our classes are small to ensure student veterans receive individual instruction from our highly effective instructors," said Bollman, who is a Navy veteran.

Ryan Curtis, who is VUB's program coordinator, said three instructors will teach classes on Tuesdays and Fridays, with he and instructor Haley Laffoon teaching math and another instructor teaching math, science and English.

He said learning will not only take place at Chaffee Crossing, but also anywhere students have access to an internet connection.

"We are developing learning management systems to access information online," Curtis said. "That way, veterans will have more options when learning the material."

The learning management systems will also allow veterans outside of the Fort Smith area and Northwest Arkansas to take part in the program, he said.

A veteran who has gone through the program is Sgt. Jason Cates, who served in the U.S. Army for 13 years before leaving the service in 2007.

"Overall, it helped me get acclimated to going to school," he said, adding that he had tried taking classes through an online college, but without much success.

Now a senior social work major at the University of Arkansas, Cates has gone from using VUB to improve his math and English skills to maintaining a 3.6 GPA and looking forward to attending graduate school in the near future. But he said his dreams of going to college and eventually working with veterans suffering from post traumatic stress disorder and other mental ailments would not have been possible without VUB and other campus programs for veterans.

"It was a huge adjustment," he said moving from active duty to the classroom. "If not for this program, I wouldn't have made it."

Bollman said Cates' success story and his desire to help other veterans is what the program, which is free to veterans, is all about.

"We are hoping that us all being veterans can help," she said. "We've all been through a lot of the same experiences."

More information about the program can be found at the program’s website or by calling (800) 262-1681.

Republican gubernatorial candidate Asa Hutchinson spoke to the Political Animals Club of Central Arkansas on Tuesday morning. A group of around 100 politicos gathered for breakfast on the top floor of the Regions building in downtown Little Rock to listen to the frontrunner for the Republican nomination.

Hutchinson began his remarks by poking fun at himself and his potential general election opponent, Democratic candidate Mike Ross, by listing the top five reasons Ross was able to raise $1.97 million for his campaign.

5. According to The City Wire, the odds are 1/15,000 of a third Mike in a row being elected Governor. So, the donors thought they were buying lottery tickets!

4. While publicly saying he was not going to run for Governor, Mike Ross secretly had a telephone surgically implanted in his ear.



3. Mike Ross hypnotized the donors and explained that his vote for Obamacare will not be an issue in 2014.



2. He promised a John Burkhalter home in every driveway.



1. Mike Ross announced his support for Bill Halter to run for President of the AFL-CIO.



The meat of Asa’s speech focused on how he feels Arkansas can prepare for what he called the “coming jobs war.”

While touting Arkansas’ unique position to compete in today’s job market, he pointed to several statistics that show Arkansas lagging in job growth compared to neighboring states. To compete, he pointed to three areas he felt were critical.

First, Hutchinson said Arkansas needs to lower its state income tax rate. With a 7% top marginal rate starting at $32,600 of taxable income, Arkansas has one of the highest income tax rates in the region, he said. Lowering these rates through state income tax reform is critical to attracting jobs to the state, said Hutchinson.

Secondly, Hutchinson said the state needs to pass tort reform legislation. He said he was disappointed that the state legislature was not able to tackle the issue in the previous session after the Arkansas Supreme Court struck down provisions of a tort reform law in late 2011.

“We need a Republican governor who will lead our Republican majority legislature to pass reasonable tort reform legislation in order to compete in this coming jobs war,” said Hutchinson.

Finally, Hutchinson pointed to the need for improving education, particularly in the area of technical computer science. He said preparing students for high-tech jobs was important to create a workforce that would attract high-tech companies to invest in Arkansas.

While focused mainly on job creation, Hutchinson also touched on a couple of additional issues in his appearance. He said that the state’s parole system is broken and needs to be fixed. He said when asked about developing the state’s infrastructure that he was pleased that voters approved the half-cent sales tax dedicated to roads, but felt that even more would need to be done in the future.

The Political Animals Clubs invited all of the announced gubernatorial candidates to speak. All are scheduled except for Democratic candidate Bill Halter.

Curtis Coleman will speak to the group on Aug. 8; Mike Ross on Aug. 16; and Debra Hobbs on Aug. 20.

Three groups that track the U.S. transportation sector – a bellwether for the U.S. economy – suggest uneven patterns will continue and the “wobbly nature” of recent economic trends will become “more pronounced.”

The American Trucking Associations’ Truck Tonnage Index rose just 0.1% in June after a 2.1% rise in May. Year-to-date, the index is up 4.7% compared to the same period in 2012.

The not-seasonally adjusted index, which represents the real change in tonnage hauled by the fleets, equaled 125.9 in June, which was 5% below the previous month.
 
“The fact that tonnage didn’t fall back after the 2.1% surge in May is quite remarkable,” ATA Chief Economist Bob Costello said in a statement. “While housing starts were down in June, tonnage was buoyed by other areas like auto production which was very strong in June and durable-goods output, which increased 0.5% during the month according to the Federal Reserve. ... The trend this year is heavy freight, like autos and energy production, is growing faster than lighter freight, which is pushing truck tonnage up.”

Trucking serves as a barometer of the U.S. economy, representing 67% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods, according to the ATA. Trucks hauled 9.2 billion tons of freight in 2011. Motor carriers collected $603.9 billion, or 80.9% of total revenue earned by all transport modes.

‘UP AND DOWN TRACK’
The Cass Freight Index for June was up 0.9% compared to May, but down 1.5% compared to June 2012.

“The transportation sector continues to follow the up and down track it’s been on for the last two and half years. The economy in general has exhibited more favorable trends in the last month, which should boost activity for the transportation industry over the next several months,” explained Rosalyn Wilson, a supply chain expert and senior business analyst with Vienna, Va.-based Delcan Corp., who provides economic analysis for the Cass Freight Index.

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

Wilson said domestic and global economic reports indicate that consistent economic growth patterns are unlikely.

“Despite the fact that the economy, both domestically and globally, shows no real signs of change other than more of the up and down movements we’ve been watching for close to three years, the transportation sector should experience some noticeable trends. These trends will probably be of the wobbly nature we have become accustomed to, but more pronounced,” Wilson wrote.

DRIVER SHORTAGE
She also expects the new hours-of-service rules to impact the entire U.S. economy, “as virtually all products are moved on a truck at some point.” The new rules increase restrictions on how long and when drivers can operate a truck. Wilson said the new driver rules and a driver shortage are likely to increase shipping rates. Higher shipping rates often translate into higher shelf prices.

“Projections are that the driver shortage could climb to 100,000 by year end, pushing up wages and benefits to attract and retain drivers. Given that we are already at or close to a one hundred percent turnover rate for drivers, these labor costs could rise quickly as qualified drivers jump companies in search of better pay,” WIlson estimated. “Rail intermodal will serve as a pressure valve, absorbing more freight, but truck shortages will begin to manifest as we enter the traditional holiday shipping period, pushing up rates.”

Brad Delco, a transportation industry analyst for Little Rock-based Stephens Inc., said freight volumes were lower than expected during the second quarter, with improvements seen in late June.

“Heading into 2Q'13 truckload earnings, we see little to write home about as the freight environment for the most part remained relatively balanced from a supply / demand perspective,” Delco wrote in a July 16 trucking industry earnings preview. “However, after a rough start, with April demand trends lagging year-ago levels, we did see modest sequential improvement in May with late June trends that accelerated to levels above prior-year levels.”

INDUSTRY CHALLENGES CONTINUE
Delco also thinks the truckload sector “remains challenged” with driver shortages, difficulty in raising shipping rates and the hours-of-service rule changes.

In the note, also authored by associate analyst Ben Hearnsberger, Delco made the following observations.
• Freight volumes were mostly lower than expected in the quarter though we have heard that the last two weeks of June were significantly better.”

• Difficult weather conditions were likely the culprit early in the quarter, but improving weather led to tightening capacity later in the quarter as seasonal freight picked up (home and garden, beverage and produce).

• Our private checks have indicated that the last couple of weeks in June were significantly better on a year-over-year basis with strength evenly spread out across the country, except for the Pacific Northwest.

• All things combined, we believe shipment volumes were incrementally lower in 2Q than expected which should negatively impact utilization.

Sales tax revenue in Fort Smith continues to head in the wrong direction, with the June report showing revenue down more than 4% compared to budget expectations. June also marked three consecutive reports in which collections were down compared to 2012.

Each of the city’s 1% sales taxes (1% for streets and 1% for water and sewer projects) collected $1.608 million in the June report, down 1.22% from the same period in 2012, and 4.18% below budget estimates. (Because the state of Arkansas has a two-month delay in reporting collections back to the cities, the city of Fort Smith — for budgeting purposes — has historically reflected the collections on a one-month delay. Which is to say, the tax collections remitted to cities in July are from taxes collected in May and transferred by merchants to the state in June.)

For the first six reporting months of 2013, each of the 1% sales taxes generated $9.879 million, down 1.33% compared to the same period of 2012, and 4.17% below the budget estimate.

Collections in 2012 of the two 1% taxes totaled $39.21 million, slightly ahead of the $38.683 million during 2011. The 2011 collections were 3.9% above 2010 collections.

Fort Smith’s share of the county 1% sales tax in the June report is $1.253 million, down 4.03% compared to June 2012. The collection was down 6.37% compared to the revenue estimate.

For the first six months of 2013, the countywide tax has generated $7.678 million for Fort Smith, down 2.01% compared to 2012 and down 4.39% compared to budget forecasts.

The countywide tax collection is critical because the revenue is a little more than 40% of the city’s general budget of roughly $42 million. A majority of the general fund budget general supports fire, police and other critical city functions. The dip in collections has resulted in city officials seeking 4% budget cuts from all departments.

“We still think that will get us there,” Assistant City Administrator Jeff Dingman said Tuesday (July 23) when asked if the 4% cuts would be enough.

Dingman said city officials also rely on the “unspent portions” of the budget to respond to the decline in collections.

Statewide, June revenue from sales and use collections, typically a sign of consumer spending and confidence, reached $183.9 million, up 3.1% compared to June 2012, but below the state budget forecast by 0.9%. For the state’s fiscal year (July 2012-June 2013), sales and use tax collections totaled $2.124 billion, up just 1.1% compared to the 2012 period, and 1.4% below forecast.

PREVIOUS ANNUAL COLLECTION INFO
2% sales tax collection (1% for streets; 1% for water/sewer bonds)
2012: $39.210 million
2011: $38.683 million
2010: $37.229 million
2009: $37.554 million
2008: $41.226 million
2007: $37.858 million
2006: $36.840 million

Fort Smith portion of 1% countywide sales tax
2012: $15.279 million
2011: $15.15 million
2010: $14.89 million
2009: $15.04 million
2008: $16.61 million
2007: $15.15 million
2006: $14.71 million

Fort Smith city directors spent much of the noon study session today (July 23) discussing the widening of Albert Pike and Free Ferry Road.

In 2006, the city undertook a road-widening project along Albert Pike, from Free Ferry to Grand Avenue. The original design had proposed a widening of Free Ferry, along with the installation of a traffic signal where the road intersects with Albert Pike.

But according to a memo from City Administrator Ray Gosack, the Board of Directors made changes to the project in April 2005 following public input on the design, which left Free Ferry as a two-lane road and the intersection as a four-way stop.

In the years that have followed, traffic along Albert Pike has increased, with the segment between Grand and Kinkead Avenues increasing from 7,800 cars per day in 2005 to 8,400 in 2012. The segment between Park Avenue and Free Ferry has increased from 7,500 cars per day in 2005 to 7,900 cars per day in 2012. According to Director of Engineering Stan Snodgrass, the thresholds the road met in 2005 for signalization and adding a turn lane are still met today, as proved by the numbers.

Among the options presented to the Board, the original project would add a turn lane on both sides of Free Ferry that would allow drivers to turn onto Albert Pike while not backing up traffic. The land needed for the extra turn lane would be taken from the south side of Free Ferry, Snodgrass said, which would provide the least disruption to residents since the land needed is largely undeveloped.

Another option would install the same additional turn lanes, but the needed land would be taken from the north side of Free Ferry, which he said would require land to be taken from homeowners and would place the expanded road much closer to homes than the previous option. It would also cost more, with the second option totaling about $1.9 million, versus $1.8 million for the first design option.

A third option would also cost about $1.9 million and it would install the city's second roundabout at the intersection, eliminating any need for a traffic signal.

Even though the option would eliminate the traffic signal necessity, Snodgrass said he was not wild about the idea.

"I'm not against roundabouts in general, but if we're going to be installing one, I don't think it needs to be here where 14,000 cars per day go through this intersection."

The city's other roundabout is located in the Riley Farms neighborhood and has a traffic count that Snodgrass considers "low volume."

Many of the city directors voiced opinions on the traffic issue, with Mayor Sandy Sanders stating that he has only noticed traffic troubles "when school is in session."

Director Mike Lorenz, whose has a child enrolled at Trinity Junior High, a private Catholic school that sits near the intersection, said traffic is a challenge before and after school. He suggested the city's engineering department explore other alternatives for traffic flow, such as making improvements to 46th Street or adding a right turn only option coming out of the school onto Albert Pike.

Director Pam Weber voiced opposition to the plan for signalization due to the area being "historical."

"Free Ferry is one of the most historical areas in this city and you have a lot of people who have bought into the history of those homes and have done a lot of renovating and they keep those properties very nice," she said. "And you think about things we talked about neighborhoods' entrance, trees and sidewalks, to me a signal is not a good entrance to a neighborhood. So I am in no way for this. I just don't think it will be good for that area."

She backed Lorenz's idea of exploring other alternatives involving the right turn only lane and improvements of 46th Street.

Director Philip Merry championed the existing four-way stop, saying his background in risk management tells him that drivers will be more cautious, especially near the school, at a four way stop than at a light.

"I think we all agree that we need to do something to alleviate traffic. … I just don't know what the right answer(is)," Lorenz said.

No action was taken on the proposal, with Snodgrass saying he would bring other ideas back to a future study session in September.

Interstate 49 annexation. If that sounds familiar, that is because it is.

At a Feb. 5 Fort Smith Board of Directors meeting, City Director and Vice Mayor Kevin Settle floated the idea of annexing part of Interstate 49 around the intersection with Arkansas Highway 22 (Rogers Avenue/Fort Street) in Barling in order to allow growth and development in the area.

While that idea went down in defeat pretty quickly, Settle has proposed another annexation plan encompassing a different part of the new I-49, this time at the interstate's intersection with U.S. 71 south of town.

Settle proposed the latest annexation plan during the Board of Directors retreat over the weekend, though he said the idea has had a lot of thought put into it.

"Actually, it's something I've thought about for a little bit and I wanted to kind of, I thought the retreat was the perfect time to bring it up and an opportunity for the Board to start looking at the growth of the city, future planning. So I thought the retreat was the right spot to bring it up and I thought with the road about done and the city has area around it and we have the water, we do the water in that area, it's just a natural progression for us to get down there and annex the land."

The plan would annex land from Sebastian County, which would move those residents into city limits. And while it may seem like a big transition, Director Keith Lau said those residents are already under the planning jurisdiction of the city.

"It follows into our water and sewer plan, as well. Well, you know, that's part of that ETJ, that extra-territorial jurisdiction, and then our planning area and our whole development plans. That's where we think a lot of the city is going to grow, so it makes sense to go down and annex it and take advantage of the fact that we're going to be putting water and sewer down there and servicing that area."

Lau said Settle’s previous I-49 annexation proposal was taken out of context and that it was "just an honest attempt to help them (the city of Barling) out" by annexing land and allowing the sale of alcohol, which would have spurred economic development around the new highway.

While the previous attempt at annexation would have required the city of Barling's approval, the land under consideration now is in the county, which would have different annexation procedures.

Assistant City Administrator Jeff Dingman, who is also an attorney, said allowing residents to vote on a proposed annexation is typically "the best way to do it," though there are other options and methods available to the city.

"Technically, the city can force somebody to annex if they have reason to, but generally it works a lot better and the city has historically not annexed areas unless the land owners agree and make request, that sort of thing," he said. "But they are already subject to zoning and planning restrictions."

Even though citizens in the area are already on city water and under the city's ETJ, two services residents in the area cannot take advantage of is fire and police protection, which is provided by the county sheriff's department and volunteer fire departments.

By annexing the area into Fort Smith, the new Fort Smith citizens would receive the protection, which Lau, a real estate agent, said would likely reduce insurance premiums in the area.

"They would also enjoy a lower insurance rating because of our ISO rating with the city, so it would lower their insurance cost,” Lau explained.

The savings on insurance would likely not be felt, though, as the new residents would be subject to the city's ad valorem tax of five mils, according to Lau.

"I haven't done the math on that, but there would be some offset on that, yes," Dingman confirmed.

Settle said the idea is just that – an idea. He does not know a timeline for when or if the city will pursue annexation.

"If the landowners agree, if the county agrees, then let's start the discussion and see where it leads us."

Police may know exactly where you've been at any given day and time with new technology that has been popping up at police departments across the nation, and it has one organization watching for possible violations of the Fourth Amendment right to due process.

A September 2009 report – “Privacy impact assessment report for the utilization of license plate readers” – from the International Association of Chiefs of Police provides this definition of the technology that scans and records license plate data:
“License Plate Reader systems consist of high-speed cameras combined with sophisticated computer algorithms capable of converting the images of license plates into computer-readable data. LPR systems typically utilize specialized cameras designed to capture images of license plates, whether from fixed positions or mobile patrol vehicles.”

Holly Dickson, legal director of the American Civil Liberties Union of Arkansas, said some Arkansas police departments are using license plate scanners as a law enforcement tool.

FIRST AMENDMENT CONCERNS
A July 23 report from the national ACLU argues that such systems “endangers our rights of protest and association and has the potential to reach deep into our lives and alter our daily decision making.” The ACLU authors argued for a “strict retention” policy to limit the potential for erosion of civil liberties.

The IACP report from 2009 also mentions the risks of the technology.

“Recording driving habits could implicate First Amendment concerns. Specifically, LPR systems have the ability to record vehicles’ attendance at locations or events that, although lawful and public, may be considered private. For example, mobile LPR units could read and collect the license plate numbers of vehicles parked at addiction counseling meetings, doctors’ offices, health clinics, or even staging areas for political protests,” noted the report.

The IACP report noted several methods to protect against unauthorized use of data collected from the readers. The methods include system audits, establishing policies that prohibit unauthorized data sharing and establishing punishments for those who violate rules associated with data management.

ARKANSAS RULES
But while other states may not have rules in place on what data can be stored, for how long and what it can be used for, Dickson said Arkansas has taken a step to be pro-active in dealing with privacy concerns.

"There was a law passed this last session that limited use, storing and data, of license plate scanning devices in Arkansas," she said, explaining that Act 1491 dictates any data not part of a criminal investigation that is collected by the scanners has to be deleted within 150 days of collection.

Rep. Nate Steel, D-Nashville, was the sponsor of the legislation, which he pushed for after hearing a story on National Public Radio on the use of license plate scanners by the Little Rock Police Department.

"I listened to a story on NPR about the use of the new scanners purchased by the city of Little Rock and I contacted someone with the city to see if they had a written policy, and they didn't at the time," he said. "I saw that there would be a trend statewide and that it would be regulated, one way or another."

Steel, who is seeking the Democratic nomination for attorney general in next year's election, said the bill he wrote, with support of many conservative legislators, was intended to strike a balance between a police department's need to conduct investigations and the public's right to privacy.

Dickson said the ACLU of Arkansas was supportive of the bill, which also limits the sharing of data.

"It limits the private use of license scanners and I could not use it and sell data about where my neighbors were and when," she said. "It defines those."

FAYETTEVILLE, FORT SMITH READERS
Two departments in the area using the scanners include the Fort Smith and Fayetteville Police Departments.

In Fort Smith, Chief Kevin Lindsey said two of the scanning units are owned by the city.

"They're not used on a regular basis," he said, though he explained that the scanners can be used for a variety of purposes, including looking for stolen vehicles or sex offenders.

"When we first got them, we got them for detecting stolen vehicles. We would go through hotel parking lots and (we could locate) people that may be wanted that come back on the registration," Lindsey said. "They're not used a whole lot, and they're not in operation all the time."

The data, he said, compared with "the ACIC (Arkansas Crime Information Center), sex offenders and the BOLOs (be on the lookout) that come out from dispatch. We can put a BOLO list into the system. It's a BOLO for plates, just a direct comparison."

LIMITED LOCAL USE
Another feature available to the office is a geotagging feature, according to Lindsey.

"We can look at the history that this vehicle was seen in the same spot three days ago. You can track a vehicle's movement or stationary route. Once again, it's not something we use."

While Fort Smith's police chief was very open about the license plate scanners and how the systems can be used, Fayetteville Police Cpl. Dan Montgomery would only say that his department has a license plate scanner on one car that is used "only for drug interdiction" on Interstate 540.

Public Information Office Keith Foster of the Rogers Police Department said his department does not have scanners and he is unsure whether the department will invest in the technology.

"As far as I know, they haven't talked about it."

Lindsey said concerns about privacy and protection are something his department takes seriously, but added that the information gathered by his department is taken on "public streets" and that no seizure of goods is taking place.

"All we're doing is just comparing information," he said. "It's not a profiling type of thing. It's a solid piece of information we use to compare with what we got off the license plate scanner. It's not intrusive at all."

The Fort Smith metro jobless rate for June is likely to be lower than the May 7.7% rate. That’s what the June Baloney Sandwich Index predicts.

May’s 7.7% jobless rate was well above the 7.2% in April, and higher than the 7.3% in May 2012, according to the U.S. Bureau of Labor Statistics (BLS). May was the 53rd consecutive month the Fort Smith metro jobless rate has been at or above 7%.

Unemployed persons in the region totaled an estimated 10,249 during May, above the 9,490 during April and the 9,725 during May 2012.

Ken Kupchick, author of the index and director of marketing and development for the River Valley Regional Food Bank, says the index has a 68.2% correlation with Sebastian County unemployment numbers. He uses three numbers to compute the BSI:
• The number of sack lunches served by the St. John’s Episcopal Church Sack Lunch program;
• The Sebastian County jobless rate; and,
• The Fort Smith metro jobless rate.

“The Baloney Sandwich Index has continued to show a strong correlation with county and metro unemployment. After predicting the uptick in unemployment for May, the June Index is predicting another leveling off,” Kupchick noted in his report.

The Index has moved from 125.4 in December to a low of 89.4 in February, rising steadily to 130.4 in May and settling back down to 126.4 in June. The Index at June 2012 stood at 175.2 before an August peak of 201.9.

Kupchick said the index decline in 2013 is primarily the result of a policy change at St. John's Sack Lunch program. Because of the long-term unemployment in the Fort Smith area, program volunteers were providing extra meals to those who requested them. The extra meals were included in the index count.

“However, the cost of providing the added meals was such that the program adopted a new policy as of January 2013. Starting this year, in response to a request for additional food, volunteers provided a extra sandwich rather than an entire lunch. The added sandwich is kept out of the total lunch count,” Kupchick explained.

The program began in 1986 by the church, located in downtown Fort Smith, to help the homeless. The handful of volunteers that began the program has grown to an estimated 125 volunteers who support the effort.
 
Kupchick provided the following notes on the index track.
• The drop forecasted the ease in the unemployment rate from from a high of 8.4% at the county level in January to a low of 6.8% in May and from a high of 8.7% at the metro level in January to a low of 7.2% in May.

• As the Index kicked back up in May, so did the unemployment rate to 7.3% and 7.7% at the county and metro levels, respectively.

• The slight downturn in the June Index suggests another softening in the unemployment rate.
 
• In looking at the June history, the number of monthly lunches distributed by the program continue to exceed the levels offered in '09 and '10 at the beginning of the recession's sting.

June jobless numbers for Arkansas’ metro area will be available on July 30. While the jobless rate is not now available, the preliminary BLS report shows that non-farm employment for June is 120,200, up compared to the 119,200 in May, and more than the 117,000 in June 2012. If the number holds, it will be the first time since December 2008 that non-farm employment in the Fort Smith area topped 120,000.

Arkansas’ June jobless rate was 7.3%, unchanged from May and unchanged from June 2012. Although the jobless rate remained the same compared to June 2012, the size of Arkansas’ labor force fell 1.67%, and the number of employed fell by an estimated 20,949, or down 1.66%.

The financials are improving but the losses continue at Van Buren-based USA Truck, with the trucking company reporting Wednesday (July 24) a first half 2013 loss of $3.5 million, better than the $8.4 million for the same period of 2012.

A second quarter loss of $1 million was booked, but was an improvement over a $3.5 million loss during the second quarter of 2012. The per share loss of 10 cents, however, missed the consensus analyst estimate of a 6 cent per share loss.

Total revenue for the first six months of 2013 reached $271.766 million, up 7.3% compared to the 2012 period. Second quarter total revenue was $139.738 million, up 7.84% over the second quarter of 2012.

“We reduced our net loss by 70.0%, marking our second consecutive quarter of material year-over-year improvement in operating results,” USA Truck CEO John Simone noted in the earnings statement. “We believe our turnaround plan gained traction during the June quarter, extending the year-over-year improvements in base revenue, operating income and net loss we achieved during the March quarter. While we are encouraged by our progress, we are not satisfied and have not yet achieved our top priorities of returning to profitability and restoring shareholder value.”

Simone was named CEO in February, and replaced Cliff Beckham, who was moved to the post of chief financial officer. Simone has more than 30 years of operational and management experience in the transportation industry with leading companies that include UPS, Ryder, and Greatwide Logistics. He was the CEO of LinkAmerica where he led a successful operational turnaround.

COST REDUCTIONS
An area of improvement cited by Simone in the report was in reducing operating costs in the truck segment. According to USA Truck, trucking revenue was up 13.3% in the quarter, with costs up only 8.2%.

“Despite those cost improvements, we believe substantial opportunity remains to realize more earnings leverage in our Trucking model in the areas of asset productivity, equipment maintenance, insurance and claims, fuel economy and driver retention,” noted the USA Truck report. “Internal efforts to improve those costs are at various stages of implementation, and we are taking measures that we anticipate will accelerate the pace of progress.”

The average number of in-service tractors during the quarter was 2,241, up from 2,171 during the 2012 quarter. Base revenue per loaded mile was only slightly improved from $1.627 in the 2012 quarter to $1.629 in the 2013 quarter.

In its logistics and brokerage business, the company reported second quarter operating income of $2.7 million, up from $2 million in the 2012 quarter. The increase came with a 5.2% drop in segment revenue.

FINANCIAL HISTORY
Significant financial gains will be required in the second half of 2013 if the company is to avoid five consecutive years of losses. The company reported a $17.54 million loss for 2012, a 2011 net income loss of $10.77 million, a 2010 loss of $3.308 million, and a $7.177 million loss in 2009.

Many transportation industry analysts are not optimistic about improved conditions for trucking companies in the second half of 2013. Tepid freight demand, driver shortages, increased costs from a change in federal hours-of-service rules and an inability to seek higher shipping rates are cited as some of the factors that could limit trucking company earnings.

“Projections are that the driver shortage could climb to 100,000 by year end, pushing up wages and benefits to attract and retain drivers. Given that we are already at or close to a one hundred percent turnover rate for drivers, these labor costs could rise quickly as qualified drivers jump companies in search of better pay,” said Rosalyn Wilson, a supply chain expert and senior business analyst with Vienna, Va.-based Delcan Corp., who provides economic analysis for the Cass Freight Index.

Simone said efforts to improve “miles per seated tractor” and “several internal initiatives” helped USA Truck reduce driver turnover by 31.2%.

The thinly-traded shares of USA Truck (NASDAQ: USAK) closed Wednesday at $5.83, down 46 cents. During the past 52 weeks the share price has ranged from a $6.98 high to a $2.65 low.

Home sales across Northwest Arkansas and much of the country are being fueled in part by all-cash deals, short sales and institutional investors, but the Fort Smith metro area is bucking that trend.

A new report from RealtyTrac revealed 30% of the home sales in June across the U.S. were all-cash. That was fairly consistent with the year-ago period. Statewide, cash deals were 29% of the real estate transactions in June. up from 24% a year ago.

Local cash deals represented 16% of homes sales in Sebastian County and 18% of the residential purchases in Crawford County during the month of June.

In both areas, cash transactions were down from a year ago - 29% and 32%, respectively.

According to RealtyTrac, institutional investors make up a small part of the Fort Smith metro area with 1% of sales in Sebastian County and 5% in Crawford County. These levels were comparable to investor activity a year ago.

Real estate analysts have said markets where investors and cash transactions have been heavy, home prices have risen. RealtyTrac indicated the Fort Smith metro area has not seen a rise a home in prices, like the majority of the nation. Without the investor activity helping to drive up demand, local median home prices declined 10% in June, according to RealtyTrac data.

The median home sales price in Sebastian County in June was $111,000, down from $123,500, a year ago. Median sales prices slid 5% in Crawford County to $112,000, according to the report.

Other areas in the state that have seen heavier investor traffic and higher home sales include Benton and Washington Counties. The Northwest Arkansas market has experienced an 8% jump in median home prices this year and investors make up roughly 25% of sales in the two counties north of the Bobby Hopper Tunnel.

Daren Blomquist, vice president with RealtyTrac, said a flurry of institutional investors and cash buyers flocked into the single family market about a year ago, pushing up prices and picking clean the best inventory available in many areas across the country.

He said this is not normal nor a sustainable recovery, but those local markets have been working through this changing dynamic.

“Rising home values should continue to unlock more non-distressed inventory while also pricing institutional investors out of more markets, which, combined with rising interest rates, will cool off the pace of price appreciation,” Blomquist said.

In markets like Arkansas where lingering distressed inventory is working its way back to listing, institutional investors and cash buyers are still lurking. However, the Fort Smith metro area showed no distressed sales during the month of June, according to RealtyTrac.

Diana Olick, a real estate analyst with CNBC, said investors are chasing distressed properties, when you find one, you will also find the other.

The Fort Smith metro area has had neither to help create more buyer demand in that market this year.

Of the 13 companies that have applied for the construction manager at-risk position created to work with designers and subcontractors on the new Ben Geren Aquatics Center, officials from the city of Fort Smith and Sebastian County have interviewed five prospective construction managers.

Deputy City Administrator Jeff Dingman said deciding who to interview was not an easy task.

"We have a hard time narrowing them down. They were all good contractors, qualified contractors."

Of all of the companies that applied, County Judge David Hudson said his top priority was seeking a company that had experience with the type of project the city and county would be embarking upon.

"The amount of experience the different companies had varied from company to company, so that's one of the things that everybody who was reviewing that was looking at it was what type of specific background do they bring to the project,” Hudson explained.

Individuals conducting the interviews included Fort Smith Parks and Recreation Director Mike Alsup, Dingman, Fort Smith City Administrator Ray Gosack, Hudson, Andy Smith of Larkin Aquatics, According to Assistant County Administrator Scott Stubblefield, and Sebastian County Parks Administrator Shannon Toland. Kansas City, Mo.-based Larkin Aquatics is the lead designer on the project.

"It's a collaborative project, so it will be a collaborative decision," Hudson said.

One contractor eliminated early in the process was Van Horn Construction of Russellville. Stubblefield said the company did not follow the county's instructions for consideration, with the firm not submitting its documents electronically, as requested.

Another company that applied for consideration was Beshears Construction, the only company of the 13 to have applied for the position that had previously completed projects for the county since 2003.

According to information obtained through a Freedom of Information Act request, Beshears has completed four Sebastian County projects totaling $18.842 million in the last 10 years, which accounts for 74.45% of the $25.309 million in projects undertaken by the county in the last decade.

Asked whether Beshears' previous experience working on county projects would give the company an advantage in the selection process, Hudson said the most important factor was a company's ability to do the job required, which will be to successfully take the Ben Geren Aquatics Center from a concept to a reality within the financial parameters.

"We looked at construction management experience and we also looked at experience with aquatics facilities. That's what was on everybody's mind as far as the leading indicators on who we should interview,” Hudson said.

The companies that have received interviews include Flintco Constructive Solutions, Kinco Constructors, Nabholz Construction Services, Prosser Wilbert Construction and SSi Constructors.

"Those are the five that we've interviewed, at this point," Hudson added. "Their proposals were pretty well drawn, so it was a matter of allowing them the opportunity to go back over their experience and their qualifications."

The experience and qualifications may not matter if the construction manager approach is found unconstitutional. Sebastian County Quorum Court member Danny Aldridge voted against the construction manager process and has asked for an opinion from Arkansas Attorney General Dustin McDaniel. Aldridge’s request was sent through Sen. Jake Files, R-Fort Smith. Aldridge believes a construction manager process skirts laws that require open bidding for public projects. McDaniel has yet to issue an opinion on the request.

Using a construction manager at-risk, Hudson asserts, is still the best way to work within the cost constraints that both the city and county have, adding that to do separate designs showing what different dollar amounts could buy would run more than $60,000 versus putting that design money into the project and using a construction manager to work with the designers on ways to reduce costs.

He said sealed bids for subcontracting work would still be submitted for the project and opened in a public forum, such as one of the large courtrooms in the Sebastian County Courthouse.

Hudson and Dingman are confident a decision on a construction manager can be made in time for the Sebastian County Quorum Court and the Fort Smith Board of Directors to vote on a construction manager at-risk contract at their Aug. 20 meetings.

"That's the one that we're shooting for, our (the city's) second (Board of Directors) meeting in August," Dingman said.

And as for the planned opening date of Memorial Day 2015, Dingman said the likelihood is still good that the date will stick.

"The designer has indicated that they've started some work on the plans, but they don't want to get too far in the process before getting a manager on board to help with cost estimating," he said. "There's still a pretty good confidence level that we can have the design documents done before the end of the year and put the bid packages out, the sub-contractor bid packagers out, to give the the contractor a good 12 to 14 months to get it (built) and hopefully still open Memorial Day of 2015, but we'd like to have hold of that before (Memorial Day) for life guard training. That'd be ideal."

While business leaders and educators have embarked on an effort to understand and solve a broadband shortage in the state’s public schools, lawmakers will have a final say on signing off on a plan.

Earlier this month, Gov. Mike Beebe (D) convened two working groups – Fast Access for Students, Teachers and Economic Results (FASTER) and the Quality Digital Learning Study (QDLS) committee – to find ways to boost broadband access to nearly 460,000 Arkansas K-12 students.

According to the Arkansas Department of Information Services (DIS), only a handful of the state’s public schools may have a nationally recommended broadband capability of 100 Mbps per 1,000 students and staff. The average Arkansas school district with 1,800 students currently has 40 Mbps of bandwidth and needs at least 140 Mbps more, the department concluded. Business leaders with leading Internet Service Providers (ISPs) contend the situation is not nearly as negative as the DIS report projected.

Without the necessary bandwidth, Arkansas public schools could be in jeopardy of failing to meet forthcoming Common Core testing standards and perhaps, more importantly, students and teachers could miss out on new digital academic opportunities that are redefining the education delivery system.

THE TIMES ARE A-CHANGIN’
Dr. Ed Franklin, executive director of the Arkansas Association of Two-year Colleges and chairman of the QDLS group, says a revolution in education is clearly underway due to technological advancements.

K-12 students are the pipeline for two-year and four-year colleges in the state and Franklin is keenly aware that those graduates must have the skill sets to be employable eventually.

“How do we provide the tools to the schools for the students so that we can provide that workforce of the future?” he asks. “It used to be that the teacher and the textbook were the possessor of all knowledge. You sat there in the classroom and read your textbook and listened to your teacher and that was your knowledge. It’s not the case today.”

While traditional classes remain, students at all levels are now taking online courses or participate in distance learning. Arkansas lawmakers passed an act last session requiring every public school district and public charter school in Arkansas to create a pilot program of at least one digital learning course for students to take.

In higher education circles, MOOC’s (Massive Open Online Courses) are an increasingly popular concept that provide large-scale interactive participation from students and teachers at different locations around the world via the web. As it develops, the concept could easily become experimental in K-12 levels.

Many of these growing and diverse online offerings require scores of videos per course and educators predict that whole degrees may someday be obtained without ever cracking a textbook.

“The whole discussion about how we teach is changing, but it’s all based around having that broadband access,” Franklin says.

As chairman of the QDLS committee, Franklin said he’s focused on addressing the first task at hand: identifying the broadband data capabilities throughout the state.

“The first thing we have to do is find data that we can all agree is good data,” he says.

KEY OBSERVATIONS

Sen. Johnny Key, R-Mountain Home, chairman of the Senate Education Committee and Vice-chairman of the Joint Budget Committee, also sits on the QDLS committee. He agrees with a sentiment shared by Franklin and many Internet providers that say a more complete assessment of available broadband access is the first step in finding a solution.

“I think that’s the biggest challenge and one of the first goals we have to meet. We have to determine what is out there,” Key said. “Providers tell me that they have facilities, they have everything built out in most areas of the state to provide what is needed. The districts, on the other hand, tell us that we don’t have what we need and it’s not just for Common Core, it’s for other education delivery, different distance learning opportunities. This is completely my opinion and observation, but I think it’s a communication problem. I’m not sure the [school] districts’ IT folks and the providers are speaking the same language and vice-versa.”

Key’s eyes were opened to the problem when he filed a bill in the 2013 regular session to provide a partial solution to the broadband access issue. He sought to give K-12 schools permission to tie into the state’s ARE-ON system, which is an ultra high-speed fiber optic network connecting four-year and two-year colleges and universities as well as UAMS and a plethora of health care touchpoints throughout the state and nation.

The primary purpose of ARE-ON (Arkansas Research and Education Optical Network) is for collaborative higher education research and telemedicine.

“When I filed that bill to open ARE-ON up to K-12, I found that providers and educators had never really sat down in a room together and had a discussion,” Key said.

He wants to be careful now in tapping into ARE-ON to solve the K-12 bandwidth dilemma. Key said he wants to avoid having a public entity provide a service that private enterprise is capable of offering in a cost-effective manner.

Beebe has indicated he’s willing to push for a change to state law that currently prohibits a government entity from providing “directly or indirectly” broadband service in competition with the private sector as it relates to ARE-ON.

“There are current restrictions, statutorily – which I understand and I know where it came from,” Beebe said. “So I’m giving the private sector the opportunity to step up and do right and help us solve these problems and invest and that’s the first option. There’s always the option that those restrictions could be removed, you know.”

COMMON CORE

Rep. James McLean, D-Batesville, is chairman of the House Education Committee and is a member of the Joint Budget Committee. Also a member of the QDLS group, McLean thinks the working groups will fashion a reasonable solution to the problem in advance of 2014′s fiscal legislative session. That meeting of the General Assembly will give lawmakers a chance to address funding challenges of the broadband equation as well as potentially address any policy changes that could be required.

“From what I’m gathering, I feel like there’s going to be something coming down the pike in the next several months that we’ll be able to take to the fiscal session,” he said. “I think it will be equitable and fair and is going to be able to address the broadband issue and the Common Core issue in these rural districts that just have no broadband capacity.”

McLean is a solid supporter of the controversial Common Core initiative, which will begin testing in Arkansas public schools in 2014. The testing is believed to require the expanded bandwidth that DIS says is lacking, but Internet service providers say can largely be provided.

“Over time, I think we’ll look back 10 or 15 years from now and look at Common Core and look at the introduction of technology that comes with Common Core and I think it will have a very positive unintended consequence – the introduction of broadband and digital capabilities to very, very small rural schools and everything that comes with that in terms of content and instructional material. .. There’s just a big upside to it,” McLean says.

THE PRICE TAG & POLITICAL WILL
A big question mark in the broadband discussion that is unlikely to be settled for months is the price tag for the improvements.

Schools will have to pony up. ISPs will have to make additional investments. The state of Arkansas will most certainly be asked to contribute with one-time and ongoing money.
Early estimates peg the costs at anywhere from $17 million to $765 million to public and private entities; however, there is universal consensus that until the assessment of the broadband availability comes back, a price tag is merely speculative.

For McLean, the funding debate comes back to equity and fairness.

“You don’t want wealthy districts in one part of the state that have incredible access to digital technologies and then you have small school districts in rural areas that do not,” he contends.

“In my opinion, there will have to be some subsidy in these areas of the state where there is just no access and it’s not profitable to go in there and provide access. That’s why they’re not there in the first place,” McLean added.

Franklin explains that he is truly in “blank slate” mode. No preconceived plan exists, he insists. It may take a public-private partnership, it may take a statewide plan with regional sub-plans, he says.

While some communities – large and small – may already have infrastructure that just needs to be activated, others will require new investments, he predicts. The lay of the land may literally dictate what type of technology is most cost-effective for providing more bandwidth.

“What happens with connectivity, for example, in the Delta where you could do point-to-point fixed wireless, you couldn’t do that in the Ozarks. We have to be creative with this,” Franklin suggests.

Key argues that legislators won’t sign off on any price tag without a well-developed plan for meeting the goals of expanded bandwidth in public schools. He wants to make sure that the schools’ needs are identified properly with what’s available from broadband providers.

“Inertia in government is a tough thing to overcome. Right now, everyone is saying, ‘Yes, we’re willing to work together to get this done.’ I believe they are. I just don’t know what hurdles we’re gong to encounter. Until we know that, the timing of the funding is really hard to measure,” Key said.

“We know that it’s going to cost money,” he added. “Whether that is new funding or a re-prioritization of technology funding already in place through the matrix, through other sources, that’s a conversation we’ll have to have.”

Wal-Mart sells a lot of groceries but it’s not the most popular grocery destination in the U.S., despite its more than 4,000 stores, low prices and convenient locations, according to a recent study by Market Force.

Trader Joe’s, Whole Foods, Publix and Aldi were preferred grocer destinations, according to the May study which asked consumers to rate their satisfaction and the most recent store experience. The Delight Index measures the survey results using overall shopper satisfaction and a consumer’s willingness to recommend a store to friends and family. 

Trader Joe’s Market, which operates 400 stores across the U.S., received the highest marks among those surveyed, with a 90% approval. Whole Foods Market, Publix and Aldi also scored high in the 80% range. Wal-Mart scored the lowest ranking among those surveyed at roughly 35%, while Sam’s Club fared better at 65%.

Analysts have said Wal-Mart is not seen as  a “cool” company by mainstream consumers, like a Whole Foods or Trader Joe’s, but Wal-Mart does draw more than 138 million customers to its U.S. stores each week.

Other research indicates 69% of those familiar with Wal-Mart have a favorable opinion.

Not all grocers mentioned in this survey are located throughout the U.S. so the study broke down the results by region.

Market Force asked consumers where they had spent the majority of their grocery money in the previous 30 days. Across the South, Kroger ranked first with 16%, followed closely by Publix with 15% and H-E-B in a distant third with 5%. In the Midwest, Kroger again led the pack 11%. Meijer ranked second with 9% and Hy-Vee took the third spot with 8%.

In the West region, Safeway led by a wide margin with 12%, Kroger earned 9% and Costco received 7%. Respondents in the Northwest region preferred Stop & Shop which garnered 11% of the votes, GIANT came in second with 6% and Wegmans and Market Basket tied for third with 5%.

Again, Wal-Mart did not make the top three in any of regions, according to the survey.

KEY ATTRIBUTES
The survey allowed respondents to rank grocers on several key attributes, the top five metrics are show below with the retailer rankings. 

Wal-Mart wasn’t listed in the top 5 for convenient locations, and ranked third in low prices behind Aldi and Winco Foods. Wal-Mart did rank highest in one-stop shopping metric, tying with Target at 67%.

“With most consumers satisfied with their grocery-shopping experiences, it makes for a very competitive playing field for grocers looking to distinguish themselves from the masses,” said Janet Eden-Harris, chief marketing officer for Market Force. “We start to see the greatest opportunities for differentiation in operations-related attributes such as fast check-outs, gracious staff and atmosphere.”   

Market Force notes that competitive differentiation begins to emerge when viewing operational excellence attributes. In these areas, the survey found that higher-satisfaction brands tend to outscore other grocery brands. 
 
Trader Joe’s and Publix performed well in the operational excellence attributes, with Trader Joe’s ranking first for its atmosphere and quick checkout process, and second in the other three categories.

Publix was tops among shoppers for its cleanliness and courteous staff, and second to Trader Joe’s in atmosphere. Hy-Vee and H-E-B also fared consistently well in key categories.

Wal-Mart was not among the top five retailers in any of these operational metrics, according to the survey. The Bentonville-based retailer continues to work on store efficiencies from in-stock concerns to speedier check-outs with the Scan & Go mobile application that allows shopper to not only reduce their wait time inline but also budget their shopping trip as they shop.

PRODUCT QUALITY
In the product quality metric of the survey, Whole Foods took the top spot in meat, produce and organic options. The popular retailer also led the pack in nutritional information and in its sustainable/ green practices.

Wal-Mart was not among the top five grocers in any of those metrics, though the retailer has addressed it’s steak quality, fresh produce and healthier food options with the “Good For You” labeling initiative. The retailer is also working toward a greener footprint, but those efforts don’t seem to have swayed grocery shoppers in the recent survey.

Sam’s Club did make the top five grocers for high meat quality, ranking three spots behind Costco, who also cracked the top five for high quality produce.

Publix was the only other grocer beside Whole Foods make the top 5 list in the product quality, health and sustainability metrics of the survey.

Wal-Mart competes head-to-head with many of the grocers in the survey and continues to report it is gaining grocery market share particularly with its Neighborhood Market expansion efforts.

The survey perception is that there are also plenty of other grocers holding their own.