A report of the number of charges filed by the U.S. Equal Employment Opportunity Commission on the basis of harassment and discrimination showed the state of Arkansas' numbers dropped more than 35% from 2012 to 2013, the most of any state in the nation.

The total number of Arkansas charges filed in 2012 were 2,374, while the state had only 1,524 charges filed last year, according to the report. In neighboring Oklahoma, there were 1,360 charges, down 9.2% compared to 2012. Missouri had 1,958 charges in 2013, down 6.76% compared to 2013.

Even though the numbers would make the drop appear drastic, Vice President Mary Cooper of the Central Arkansas Human Resources Association said the bigger bit of news was the drastic rise in the number of charges in 2012 compared to other years, both nationally and statewide.

"The question becomes what was wrong in 2012? It's the sex(-based discrimination) claims. Discrimination based on sex was 50% of the total 2012 claims, as opposed to other years," Cooper, an employment attorney at the Little Rock law firm of Cross, Gunter, Witherspoon and Galchus, said.

The increase represents a rise in sexual discrimination charges of 142.89% from 2011's total of 499 charges filed, versus 2012's total of 1,212. The numbers returned to historic figures last year, with only 487 sexual discrimination-based charges filed.

Figures from the EEOC show that not only did sexual discrimination account for 51.1% of charges filed in 2012, but race-based discrimination only accounted for 31% of charges during the same period.

Fast-forward to 2013, those numbers are a near identical flip, with race-based discrimination counting for 48.7% of discrimination, while sex-based discrimination only counted for 32% of complaints, again returning to historical norms. Figures show the 2013 total for sex-based discrimination was on par with dates as far back as 2009, with no year accounting for more than 30% of overall cases except for 2012's total of 51.1%.

Cooper said one of the likely explanations was a change in policy within the administration of President Barack Obama, who has directed the EEOC to focus on more claims under Title VII, which deals with transgendered and sexual orientation as a bias, versus flat out discrimination.

Jimmy Lin, vice president of product management and corporate development at The Network — a Norcross, Ga.-based company specializing in governance, risk and compliance solutions — told The City Wire that sexual orientation charges are not reported at the federally, but instead are "dependent on each state's laws."

Because of the distinction, Cooper said a bias must typically be a matter of policy, as the Obama administration has made transgendered and sexual orientation during the last few years.

"If you say a person should dress more feminine to get a promotion, while sexual orientation isn't necessarily a protected class, bias based on that started being enforced."

Cooper also noted that the administration assembled a task force to address the Equal Pay Act, though again it is hard to pin-point a precise reason for the movement in numbers. One factor she said is not being looked at but Cooper said likely made a difference in 2013's numbers is the government shutdown.

The agency was already under increased pressure due to sequestration, the federal government's automatic reduction in spending for all agencies, which President Sunshine Bartlett of the Western Arkansas Human Resources Association said would put pressure on the agency to only pursue cases it believes are winnable.

"They are back to the same budget they had in 2009 due to sequestration. So they are looking at quality of lawsuits over quantity. They are actually filing suits on a lower number of cases where they can get more money,” Bartlett said.

Regardless of what moves the government is making by either pursuing fewer cases or enforcing different policies dependent on the whims of a politician or bureaucrat, he said Arkansas' highest in the nation drop in harassment and discrimination charges was, at least in part, to the efforts of businesses to improve workplace environments.

"This shows that businesses are putting more time and thought into their employee training programs to ensure employees understand what harassment and discrimination is and what they should do if an incident occurs. Instilling strong ethics in employees from day one is crucial in establishing an ethical workplace that's free of harassment and discrimination."

As for what 2014 will look like, whether it will see a spike similar to 2012 or stay on par with 2013 and other years, Cooper said it's too early to tell. But Bartlett said observers should expect some upward movement in the numbers.

"When you look at the numbers, there are drops and then it sort of comes back up. From 2009 to 2012, each year they were seeing the highest levels ever. But in 2014, I do think it will ramp back up and surpass the 2013 level."

Whole Foods Market appears to have taken one more baby step toward a Fayetteville location.

Plans submitted to the city of Fayetteville this week show what appears to be a Whole Foods Market planned for 3535 North College Avenue, which would make the Fayetteville location the second in the state of Arkansas and the first in Northwest Arkansas.

Rumors have circulated for months that the company was exploring sites in northern Fayetteville, near the intersection of U.S. 71 and Millsap Road.

The site that was submitted for development by Fairburn, Ga.-based S.J. Collins Enterprises was previously the site of a Mercedes-Benz automobile dealership. Conceptual drawings submitted to the city clearly show a more than 35,000-square-foot building with a Whole Foods Market sign above the front entrance.

Multiple attempts to reach Whole Foods Market by telephone and e-mail were unsuccessful, as were attempts to contact S.J. Collins, which has previously developed several Whole Foods Market-centered retail developments in Florida and Virginia. Whole Foods' website does not list a Fayetteville store under development, though it does show a Little Rock store under development. It is unclear if the Little Rock development is a relocation of the store at Rodney Parham Road and Interstate 430 or if it is a new store.

Sources with knowledge of the Fayetteville project who spoke to the The City Wire said it was still early in the development process and no deal had yet been signed. But plans submitted to the city of Fayetteville show what is a large scale development at the former car dealership site that would be anchored by the Whole Foods Market. Plans call for an additional three small stores and about 330 parking spaces.

A source familiar with the project said the process for taking the development from proposed to permitted could be long and tedious. First, the developer will have to appear before the city for a plat review on April 16, where individuals on the review committee could make comments and the developers would revise plans based on the comments from the city.

On May 1, the Fayetteville Planning Commission Subcommittee will meet and additional revisions could be required based on comments from commissioners at that time.

Should developers not run into any major hurdles, the final step before receiving a building permit would be approval from the full planning commission at its May 12 meeting, though the project could be delayed or forced to go through the full planning process again should the development not gain approval from the commission.

The earliest the development is likely to receive a building permit is June or July, though a source with knowledge of the development plans said, "I don't see them going through the first time. They'll probably get pushed out to the next round due to comments (from the commission)."

With the project so fluid and no contracts yet signed, it remains to be seen if or when Northwest Arkansas residents may be able to shop locally at a Whole Foods Market. Should the project go through, real estate professional David Erstine of CBRE Northwest Arkansas — who is not connected to the project — told The City Wire in early March that it would be a boost to development along U.S. 71 (College Avenue).

“We see clients who want to locate retail to the region but in the Fayetteville area they all want to be near Joyce Avenue and the mall area. College Avenue does not fit their criteria. If a national player like Whole Foods does decide to invest on College Avenue, it could open the possibilities for others,” Erstine said.

Ozark Natural Foods in Fayetteville, was upbeat about the news of a possible Whole Foods locating only a few miles up the street. The local food cooperative released the following statement regarding Whole Foods possible move to Fayetteville.

"We are excited to have another natural food and organic food store here in Fayetteville. The more access that people have to healthy foods in our city, the better it is for our community."

The Whirlpool site in Fort Smith that has been the center of a pollution cleanup has now had deed restrictions put in place, limiting certain future activities at the site for not only Whirlpool, but any individual or company that may purchase the site.

Word of the deed restriction was confirmed Tuesday morning (April 8) by the Arkansas Department of Environmental Quality about an hour and a half before Whirlpool officials were scheduled to update the Fort Smith Board of Directors on efforts to cleanup a spill of potentially cancer-causing trichloroethylene (TCE) that occurred at its now-shuttered Fort Smith factory during the 1980s.

Katherine Benenati, public outreach and assistance division chief at ADEQ, said by e-mail that the deed restrictions only affect the 152 acre site owned by Whirlpool and does not include the residential neighborhood north of the facility that sits atop the TCE plume.

The deed restriction, filed Monday (April 7) with the Sebastian County Clerk's office, is two restrictions that prevent the use of groundwater at the site, as well as "excavation of soil, concrete or asphalt" without the permission of ADEQ. The restrictions also state that the owner of the property will be responsible for inspection and repair of the concrete or asphalt cover which will be installed at a later time as part of the remediation plan approved by ADEQ for the Whirlpool site.

Speaking to The City Wire prior to his presentation to the Board, Whirlpool's Corporate Vice President of Communications and Public Affairs Jeff Noel said the deed restrictions were a measure to protect the public from any chemicals that may remain below the surface, even after the company completes its remediation plan, which includes the use of chemical oxidation to neutralize the TCE.

"What's really good about a deed restriction is it's required in the law. So if you have a purchaser of the property, the deed requires you to do certain things. And I think the most important one is to maintain a covering, or a cap, in the area where there is contamination so that you have a control over the kind of moisture in the groundwater that can go through rain, etc. ... A deed restriction is just one more layer of assurance that if Whirlpool doesn't own the property, that we'll see to it that whoever purchases it from us will abide by those same agreements."

In the past, other moves to impose deed restrictions on properties have been met with resistance. In early 2013, Whirlpool attempted to get the Board to pass an ordinance that would have prohibited the drilling of groundwater wells in the neighborhood that sits on the TCE plume north of its plant. The move was met with much opposition and was eventually voted down by the Board.

Deputy City Administrator Jeff Dingman said the groundwater well restriction could always come back before the Board for a vote, though no action has been initiated by anyone on the Board or at Whirlpool, he said.

During the presentation to the Board, Civil Engineer Mike Ellis of ENVIRON — Whirlpool's contracted environmental consulting firm — said 30 injection sites have been placed above the TCE plume in south Fort Smith, adding that the first set of injections was completed on March 25. A subsequent injection is likely to happen in May or June, he said, adding that ENVIRON was monitoring the plume and the developing results of the injections on a weekly basis, which he said could change to a bi-weekly basis at a later time, depending on conditions and any success with the injections.

Noel told the Board he felt good about the progress being made at the site, as well as negotiations with homeowners in the neighborhood regarding possible settlements as a result of the TCE contamination. He said any details of the negotiations would not be discussed publicly, though, due to the residents retaining counsel and lawsuits having been filed against the company.

During the discussion of settlements, Mayor Sandy Sanders requested that Whirlpool take action similar to Timex, itself in the middle of a TCE pollution cleanup near Clinton National Airport in Little Rock. The company has offered to purchase up to 40 properties in its TCE zone and previously entered into a $2.5 million settlement with the airport after the nine acres Timex occupied were deemed unusable, according to a report by the Arkansas Times.

In response to Sanders' suggestion, Noel said Whirlpool was attempting to treat residents fairly.

"Because of the path that some of the residents have chosen to follow by using attorneys, I'm not in position where I can go to the media and explain for them the type of discussions that are being held with the residents. All I can tell you is we have said from the beginning that we look forward to finding a path of successful resolution with the residents and I won't give you the details of what Timex is offering, but I think there are different reactions. Our commitment is to treat the residents fairly. We're doing that and we've communicated with them and there's been a lot of things discussed with both the attorneys and with the residents."

Attorney Ross Noland of Little Rock-based McMath Woods, who represents about two dozen clients who have filed suit against Whirlpool, said Tuesday he was not at liberty to discuss negotiations with the company or whether any settlement offers have been extended.

As for what will happen to the property once remediation is completed, Noel said Whirlpool is in talks with two companies about purchasing the property, adding that "sophisticated" real estate professionals would not balk at purchasing the property, even with the deed restrictions in place. Instead, he said many potential investors would see the benefit of the site and would be eager to make use of the site's amenities and the local workforce.

Noel also referred to the often rocky relationship between Whirlpool and the city of Fort Smith, adding that the company's actions early last year in attempting to pass the groundwater well restriction were not productive and added that movement to speed up remediation efforts were because the company listened to Fort Smith leaders and residents.

"I think it's important to remind myself that it was just about a year ago when I was here and I don't believe it was a very productive meeting because of us. And I think because of your direction and your insistence that we continue to communicate, I think a lot of progress has been made and we are committed to maintaining that level of communications with you, but I will say it started with your leadership and I think it's your act of stewardship and making sure we do the right thing that is a really, in my mind, one of the reasons progress has been made."

Arvest Bank has chosen Fort Smith banker Craig Rivaldo to head up its Benton County market operations. Jason Kincy, spokesman for the bank made the announcement in an email release this afternoon (April 8), just shy of one month after Dennis Smiley’s resignation on March 13.

Rivaldo will take over as CEO of Arvest Bank Benton County effective May 1. A replacement for the Fort Smith market will be made later, as a search for the right candidate is still underway, the bank said.

“Craig Rivaldo is an excellent banker and an outstanding individual who embodies the qualities that we seek as a company. His career with Arvest spans more than 27 years and, in that time, he has proven himself to be an effective leader, a trusted decision-maker, and someone who cares deeply about the communities he serves. We are fortunate to have Craig and his family as a part of Arvest in Benton County,” said Scott Grisby, a regional executive and interim president in Benton County.

Rivaldo began his career with Arvest as a trainee with McIlroy Bank in Fayetteville (now Arvest Bank, Fayetteville) in 1987. In 1999 he was one of the original associates who started Arvest’s Fort Smith operations from the ground-up. In July 2010 he was named president and CEO in Fort Smith – one of Arvest’s top-performing banks over the past few years – when John Womack was promoted to lead Arvest operations in central Arkansas. Rivaldo began his banking career in 1982 and has worked in many areas of the bank including as a credit analyst, loan operations, commercial lending and sales manager.

“I am very excited and humbled to be given the opportunity to join an incredibly strong team in Benton County. It is truly an honor to join the bank where this company was founded and to have the chance to serve these great communities and customers.” Rivaldo commented.

Arvest Bank of Benton County is the largest of Arvest’s 16 locally-managed banks and has 28 locations in 13 communities and more than 400 employees.

Rivaldo is a graduate of Northside High School in Fort Smith, Arkansas Tech University in Russellville, Southwestern Graduate School of Banking at Southern Methodist University and the National Commercial Lending School at the University of Oklahoma. He and his wife Mary Jo have one son, Connor.

Two potential issues that may be on the November ballot offer contrasting attitudes from Arkansas voters.

The latest Talk Business-Hendrix College Poll of more than 1,000 likely voters shows that an overwhelming majority of Arkansans are in favor of raising the state’s minimum wage to $8.50 per hour, while voters are evenly split on a possible medical marijuana proposal.

Both citizen-led initiatives are collecting signatures before a July deadline to qualify for the November ballot.

Q: A proposal to allow the use of medical marijuana may also be on the ballot through the petition process. It would provide Arkansans the ability to use medical marijuana for debilitating medical conditions with a doctor’s recommendation and to allow patients to purchase medical marijuana at a regulated not-for-profit dispensary. If the election were held today and the measure were on the ballot, how would you vote?
45% Yes
45.5% No
9.5% Don’t Know

Q: Advocates are also seeking to place a measure on the ballot to increase the state minimum wage in Arkansas. The proposal would increase the minimum hourly wage for workers in the state from $6.25 to $8.50 over a three-year period. If the election were held today and the measure were on the ballot, how would you vote?
79% Yes
17% No
4% Don’t Know

“There is no shortage of popular opinion about raising the state’s minimum wage. It enjoys widespread support,” said Talk Business & Politics executive editor Roby Brock. “As for the medical marijuana proposal, it seems voter attitudes are nearly as divided as the votes cast in the last election cycle.”

In November 2012, Arkansas voters defeated a proposal to legalize medical marijuana by a 51.4% to 49.6% margin.  Talk Business-Hendrix College polling before and after that election suggested voters struggled with the ballot issue.

ANALYSIS
Dr. Jay Barth, professor of political science at Hendrix College, helped craft and analyze the latest poll. He offered this analysis of the poll results.

Minimum Wage
The most popular prospective ballot measure for 2014 is the minimum wage increase. Give Arkansas a Raise Now is collecting signatures to place on the ballot a measure to increase the minimum wage to $8.50/hour across a three year period. Our polling indicates that if the measure makes the ballot, it¹s on its way to passage as 79% of our survey respondents favor the measure.

Moreover, while ballot measures tend to have fairly high levels of undecided voters, that’s not the case with the minimum wage increase as just at 4% of voters don’t know their position on the issue.

Support shows itself across the entire state with it showing most strength in the more heavily Democratic Second Congressional district. The proposal also leads with all political groups. Nearly two-thirds of Republicans (64%), 92% of Democrats, and over three-fourths of independent voters (76%) favor it.

Because of independent voters’ crucial role in determining the outcome of the closely fought elections for U.S. Senate and Governor, the attitudes of this swing group indicate an opening on the issue for statewide Democratic candidates who have expressed strong support for the Arkansas minimum wage increase if they can focus campaign debate on the issue.

Of course, Republicans have a number of other issues, such as Obamacare, that are exceedingly positive positions with the Arkansas electorate. As always, the fall campaign will be about which party gains control of the framing of the debate.

Interestingly, and also particularly important because of women being a particular target in 2014, attitudes on the measure also show a gender gap with 83% of women and 74% of men supporting the measure.

Medical Marijuana
On the legalization of marijuana for use in situations where patients face certain medical maladies, the survey shows a tie with 45% of voters supporting and 45% opposing. Polling the issue of medical marijuana has, in our experience, been challenging. Voters have not always been forthright in stating their views on the issue in public opinion surveys (as we saw in 2012).

Moreover, the issue is complicated in 2014 by the fact that two proposals with slight differences have been proposed. If both were to make the ballot, this could produce confusion at the ballot box.

With those caveats in mind, all signs point to another very close outcome in 2014 if voters once again cast votes on the subject. Interesting patterns do show themselves among subgroups of voters. While the oldest group of voters (those above 65) are most opposed to the measure (39% yes/ 49% no), those in the 45-64 age group are most supportive (54% yes/39% no).

White voters split nearly evenly on the measure, but African-American voters are consistently supportive (52% yes/31% no) while Asian-Americans and Latinos are more throughly opposed.

In terms of partisanship, Democrats are solidly supportive (56%-33%), Republicans are in solid opposition (60%-28%), and, appropriately, independents split right down the middle.

Once again, assuming that the voters get the opportunity to speak on the issue in November, it appears we’re once again on our way to a close vote on the legalization of medical marijuana.

METHODOLOGY
This survey was conducted by Talk Business Research and Hendrix College on Thursday and Friday, April 3-4, 2014. The poll, which has a margin of error of +/-3%, was completed using IVR survey technology among 1,068 Arkansas frequent voters statewide.

Approximately 9% of the voters in our sample were contacted via cell phone with live callers. This is in response to the increased reliance by voters on cell phones. Additionally, we applied our standard weighting to the poll results based on age, gender, and Congressional district.

The Fort Smith Planning Commission approved a conditional use Tuesday (April 8), removing the final road block in what has been a long and winding road in the city and Sebastian County's attempts to build the $10.9 million Ben Geren Aquatics Center.

The conditional use permit approved by the commission by a vote of 8-0 was necessary, according to Deputy City Administrator Jeff Dingman, due to the commercial zoning of the land on which the aquatics center will sit along Zero Street.

"Well, every property has an underlying zone and there's certain uses that are just outright permitted in the zone, there's certain uses that are permitted by a conditional use permit. I think the underlying zone for this property is C-5, whatever it is," he said. "But a water park is not necessarily a direct permitted use for any zone that we have in town. Certainly, it's allowable for conditional use and that's what the application here is. Any time you put a park, a school or a church or those types of things, their underlying zoning is one thing, but their conditional use allow them to be there."

Senior City Planner Brenda Andrews said a public meeting was held in March regarding the conditional use permit, but no residents attended the meeting. No opposition was presented during the commission meeting Tuesday.

With the conditional use approved for the site, Dingman said the city and county can now move forward with the bid process, a process already underway and will culminate Thursday (April 10) with the public unsealing of bids in the Sebastian County Quorum Courtroom on the second floor of the county courthouse in downtown Fort Smith.

While the bidding process is intended to secure the lowest costs for local governments, Dingman said the city and county were prepared should any bids on various aspects of the project come in at totals higher than expected.

"Each bid package — and there's 30 plus bid packages — each of them is built with a set of alternate deductions. Hopefully if one piece comes in more than we expect, hopefully we can alter it by deductions on its own piece or deductions on other pieces to take some alternate deductions and make it fit within the budget."

Barring any unforeseen circumstances, city and county leaders are still expecting an opening date of Memorial Day 2015, according to Dingman.

"Yes. We're still on schedule for that (Memorial Day 2015). Hopefully we'll get the good bids in this week and contracts awarded here before the end of the month and get them going."

FIANNAHILLS CLUB REACTION
The commission meeting held Tuesday was the first since developer Lance Beaty of Fort Smith-based FSM Redevelopment Partners pulled out of a planned $20 million development that would have revitalized Fianna Hills Country Club.

A planned zoning district Beaty had applied for as part of the project was approved by the Fort Smith Planning Commission by a vote of 9-0, though a vote by the Board of Directors was tabled until a later date due to Beaty's withdrawing from the project.

Commissioner Rett Howard said the fact that Beaty pulled out of the project was "sad," adding that he "would have liked to have seen it happen." Richard Spearman, another member of the commission, said the project would have benefitted the neighborhood and the city, adding that he was surprised at the level of opposition to the project that showed to the city Board meeting the day Beaty pulled out of the project.

"From up here, I thought actually that those…there were more people in favor of the project than against it (when the planning commission voted on the project). And when people got up to speak, some of those who were opposed actually wound up being in favor of it (after having questions answered by Beaty)."

As for what happens next, Commissioner Brandon Cox said he had not heard of any plans for the Fianna PZD, but said it was important that the commission be open to any developer who may want to invest in the country club, which its owners say could close within the next one to three months.

"I mean, you know, all we can do is give the developer the opportunity and whether the business plan plays out or not, we just have to see. I don't know. I don't know other than that."

Howard said he just wants something good for the city and the neighborhood.

"I'm open to what anyone wants to suggest. But I hope it's something good. Anything for growth. Something that the neighbors can agree to and something that can be good, positive growth for our area."

Andrews said she had not heard from anyone associated with Fianna Hills Country Club regarding the PZD. Dingman said he did not have anything new regarding the PZD application, either.

"I haven't heard anything new about it other than it's on the agenda again May 6th."

Fort Smith attorney Kyle Parker, who has been named president and CEO of the planned Fort Smith-based Arkansas College of Osteopathic Medicine, said Wednesday they “are moving quickly” on what will be a $58 million college that when fully operational will house 600 students.

Parker, as chairman of the Fort Smith Regional Healthcare Foundation (FSRHF), has been the lead on pushing for the college that was announced Feb. 18. The media was notified Wednesday (April 9) of Parker’s new role with the college.

“Kyle Parker brings vision, passion and years of business experience and expertise to the role of CEO of the Arkansas Colleges of Health Education,” John Taylor, chairman of the Fort Smith Regional Healthcare Foundation, said in a statement. “We are very fortunate to have Kyle serve as CEO as we develop a medical campus beginning with a proposed College of Osteopathic Medicine. Kyle also served on the board of Sparks Hospital when the hospital was sold. Kyle and the board are committed to reinvesting the proceeds from the sale of community owned Sparks Hospital for the maximum good of our area.”

Parker recently has worked in private banking investments and mergers and acquisitions. Prior to 2011, Parker served as vice chancellor of operations with the University of Arkansas at Fort Smith, where he was initially responsible for the technology needs of 8,000 students and 1,000 staff and faculty. His role expanded in 2010 to include the strategic direction for growth at UAFS.

“I’m excited to accept the challenge of bringing this community’s vision to life,” Parker said in the statement. “Fort Smith is the perfect home for a school of this caliber and we will focus our efforts on being able to fill gaps in healthcare and provide care for the medically underserved. We’ve said it before; it’s not about building a school, it’s about recognizing needs in our area, in Arkansas and Oklahoma, and across the U.S., and using our resources to fulfill that need.”

THE COLLEGE
A fully operational school is expected to serve about 600 students, and employ around 65 (full-time equivalent jobs) with an average salary of $103,000. That impact does not include adjunct professors that will be needed for the school, he said. The school, to be located on Chaffee Crossing land (200 acres) donated by the Fort Chaffee Redevelopment Authority, is targeted to accept its first cohort of students in the fall of 2017.

There are 30 colleges of osteopathic medicine (COMs), offering instruction at 40 locations in 28 states. There is not an osteopathy school in Arkansas. Should the development of an osteopathic school in Fort Smith happen, it would be a private, non-profit institution and not dependent on continuous public funds from the state.

Parker said Wednesday that the Chaffee Crossing land has been appraised at $5 million, above the initial estimate of $4 million.

“We just continue to be grateful for their (FCRA) gift,” Parker said.

HIRING OTHER KEY PERSONNEL
He also said members of the FSRHF have interviewed seven candidates “with very very strong” medical backgrounds for the chief academic officer job. Filling the job is critical to the process because a detailed feasibility study cannot be submitted to the Commission on Osteopathic College Accreditation until six months after the CAO is hired. The foundation is set to interview four more candidates, and then narrow the list down and invite the top candidates and their spouse to Fort Smith.

“It’s my plan, at this stage, to get our dean (CAO) hired by May 15 for a start date of July 1,” Parker explained.

He said the FSRHF has hired a consultant who is helping prep for the feasibility study, and he expects the first priority of the new CAO will be to soon hire assistant deans and so they may all work on the feasibility study and develop curriculum.

“This is not a simple report. ... This feasibility study will be several hundred pages long when it is finished,” Parker said.

The FSRHF also expects on April 22 to meet with architects for the purpose of selecting a firm to work with the CAO on the design of the new college campus. Parker said the city of Fort Smith has committed $1.8 million for street, water, sewer and other infrastructure work, and Arkansas Oklahoma Gas Corp. and OG&E are donating a portion of their work to bring utilities to the campus.

“At this stage we see nothing that will slow down our timeline,” Parker told The City Wire during a Wednesday interview. “We’re moving quite quickly. I believe now that we will be able to break ground on the building in late spring of next year.”

COLLEGE, PARKER HISTORY
Revenue from the 2009 purchase of Fort Smith-based Sparks Health System is being used to build and operate the planned college. When Naples, Fla.-based Health Management Associates (HMA) acquired Sparks in a deal valued at $138 million, part of the money was used to create the Fort Smith Regional Healthcare Foundation. Foundation initiatives include supporting scholarships for individuals seeking advanced medical training, the Community Dental Clinic in Fort Smith, health education programs in area schools, and other medical training options.

The new college may help in a small way alleviate the U.S. physician shortage. Parker has said there are about 3,000 applications for every opening in U.S. medical schools. He also said the country will have to produce more doctors to push back against a possible shortage of 140,000 doctors by 2030. That number could rise to 250,000 if the federal Affordable Health Care Act if fully implemented.

Parker earned a bachelor’s degree from Arkansas Tech University and a juris doctorate from Franklin Pierce law Center in New Hampshire. He is married and the father of two children.

During his years as a private practice attorney, Parker wrote the first artificial intelligence software (CLARA) ever granted a registered copyright for the legal profession while in law school. He then created a word search engine, and digitized the Arkansas legal case opinions, statutory and regulatory laws in 1989 to release the first legal CD-ROM in history (CaseBase). In 1994, he conceived and created the first searchable legal information internet site (Loislaw.com) and continued to grow Loislaw.com into a successful publicly traded company. The company was sold Wolters Kluwer in 2001.

A bipartisan House panel unanimously rejected an ethics complaint filed months ago by the Democratic Party of Arkansas against GOP Senate hopeful U.S. Rep. Tom Cotton, but a new complaint has surfaced that has the two camps in another testy battle.

On Wednesday (April 9), Cotton’s Senate campaign released copies of the ethics complaint dismissal from allegations made in October 2013. Democrats claimed Cotton violated House rules by soliciting funds in the U.S. House of Representatives – which is prohibited – when he conducted a radio interview asking for listeners to contribute at his Senate campaign web site.

Cotton said he was outside of the U.S. Capitol building during that interview. On a 6-0 vote, the Office of Congressional Ethics (OCE) recommended dismissal of the complaint after it investigated the charge saying “there is not substantial reason to believe that Representative Cotton was inside a House office, room or building when he solicited campaign funds.”

A subsequent letter from the House Committee on Ethics reported, “As a result of its review, the Committee unanimously voted to dismiss the matter, consistent with the recommendation in OCE’s referral,” the letter said. “Therefore, the committee considers this matter closed.”

Cotton’s campaign said it did not have to disclose the ethics committee findings, but it chose to after the latest allegation coming from former Arkansas Supreme Court Chief Justice Jack Holt, a Democrat.

A spokesman for the Democratic Party of Arkansas, Patrick Burgwinkle, tells Talk Business, “Congressman Cotton has yet to provide a shred of evidence that he was not fundraising inside the Capitol on the eve of the government shutdown he caused that cost taxpayers $24 billion. Serious questions still remain about Congressman Cotton’s commitment to ethical behavior, as former Chief Justice Holt’s ethics complaint demonstrates.”

Holt filed a complaint that Cotton did not properly disclose clients that he worked for as a consultant at McKinsey & Co. prior to his Congressional service.

“Specifically, Mr. Cotton failed to fully identify his sources of compensation on the Personal Financial Disclosure Statement he filed as a House candidate on May 31, 2012. Although he identified McKinsey & Company, Inc. as a source of income, he did not identify any of the clients for whom he provided services in excess of $5,000,” Holt’s complaint reads. “Mr. Cotton’s lack of disclosure demands further investigation by the Office of Congressional Ethics.”

“This is a serious matter of transparency and public accountability,” said Democratic Party of Arkansas attorney Benton Smith. “Arkansans deserve to know whether Congressman Cotton sees himself as above the law. Congressman Cotton should give a full accounting of the clients from his time as a Washington consultant so that the people of Arkansas have the information they are entitled to when they cast their votes in November.”

But Cotton spokesman David Ray said his candidate is prohibited from disclosing private clients from his 13 months at McKinsey due to a confidentiality agreement. He added that House disclosure rules are very clear, and that the Congressman did not violate any ethics rules and went beyond what was required in his Personal Financial Disclosure Statement by including his separation certification from McKinsey.

Ray pointed to the House of Representatives instruction manual which states, “You do not have to disclose the names of clients whose identities are prohibited from disclosure as a result of a …confidentiality agreement entered into with the client at the time your services were retained.”

Cotton’s “separation certification” from McKinsey and Co. states that he will not “disclose, release, or make available to any person, entity, Firm or otherwise, without the Firm’s express written consent, any such information whatsoever (not generally available to the public), including, without limitation, the contents of any reports, memoranda, or other material covering the operations and affairs of the clients or the Firm.”

Ray said Cotton would be willing to provide “sanitized descriptions” of his work done during his tenure at McKinsey. Those descriptions would provide the scope of his services and the general work he performed, but would protect clients’ identities.

Cotton has disclosed one client he performed work for at McKinsey – the Federal Housing Authority.  Ray said that information had already been disclosed by McKinsey in a public report.

“Just like the Democratic Party’s previous complaints, this one is frivolous, false, and wholly without merit,” Ray tells Talk Business. “Tom has not only followed all ethics rules regarding financial disclosure, he has gone above and beyond the listed requirements by providing more information than he had to. The last time the Democratic Party filed one of these politically-motivated claims, the Office of Congressional Ethics and the Congressional Committee on Ethics both dismissed this matter in a unanimous, bipartisan fashion. Senator Pryor is desperate because he knows he will lose any comparison of his record as a rubber stamp for Obama with Tom’s common-sense conservative record. That’s why they keep trumping up phony complaints.”

New internal polling obtained by The City Wire in the race for the District 9 Senate seat shows one candidate with a distinct lead, while his GOP primary opponent is questioning its accuracy and flatly denying that he has any ground to make up in the race.

The poll, conducted by Rep. Terry Rice's consulting firm — Little Rock-based Impact Management Group — shows Rice, R-Waldron, leading incumbent Sen. Bruce Holland, R-Greenwood, among likely Republican voters. The poll also had Rice ahead in favorability versus Holland.

On the question of how favorable 362 likely Republican voters across Crawford, Franklin, Scott and Sebastian Counties found Holland, 34% had a favorable view of him, while 22% had an unfavorable view and the remaining 44% "don't know" their view of him.

The same question of Rice showed him with a 40% favorable, 9% unfavorable and 51% "don't know." On the question of which candidate the respondents would vote for if the May 20 primary were held today, 42% said Rice while only 30% said Holland. Twenty-eight percent are still undecided.

The poll, with a margin of error of +/- 5.15%, sampled individuals who have voted in at least one of the last five Republican primaries, according to a memo from Impact Management Partner Clint Reed to Rice dated Wednesday (April 9). In explaining the key findings of the poll to Rice, Reed pointed to the poll showing Rice's strong showing despite Holland's first mailer being received by residents in the last week.

The memo also noted that the firm running Rice's campaign feels confident he is positioned to defeat Holland next month, though Reed warned Rice to expect a shift in the campaign.

"It is very important that we prepare our campaign and supporters for an onslaught of negative advertising from the opposition and 3rd party groups in the final days of this campaign," he wrote. "I assure you they will leave no stone unturned in an attempt to win this race."

As a result, Reed said the campaign "must not hesitate to set the record straight and draw sharp contrast on the numerous conservative issues that resonate with Republican Primary voters."

Reached by telephone Wednesday, Holland dismissed the poll.

"It's really not surprising that they would present the poll like this after what has happened in the race this week," he said. "I got endorsed by one of the largest, most organized Tea Party groups in the state (Conservative Arkansas). This is just trying to generate interest in the race for them."

Though declining to go into specifics, Holland said his own internal polling showed different results in the race and attacked Impact Management's past polling.

"Well, we have our own polling methodology that we've used. My polls have consistently been good in the past. I know the group that did this poll has had some problems in the past in Northwest Arkansas, the primary season two years ago that had bad numbers for Rep. (Tim) Summers running against Bart Hester. ... (That race) turned out to be different from (its) polling."

Hester won the election by nearly seven points.

Reached for comment, Reed declined to respond to Holland's jabs. For his part, Rice said he was excited about the results of his poll numbers and would continue pushing issues that he feels are important to voters.

“We are pleased with the progress we have made in a short period of time, but there is a lot of work to do,” Rice stated. “I know that the only poll that matters is Election Day. We’ve got great support across the district, and I’m getting a great reception from voters as we talk about my small business experience and my conservative values.”

In declining to discuss his own internal polling, Holland said he wanted to catch Rice and his consulting team by surprise on May 20.

"Again, I'm not going to discuss my poll numbers. I think I know exactly where we are in this race. I don't want them to have any idea. If they are confident with their numbers and go with them, then I am happy with that."

Officials with Van Buren-based USA Truck Inc. have pulled the plug on their poison pill provision now that a hostile takeover attempt is far in the rear-view mirror and the company’s share price continues to push toward a more historic trading range.

In a statement issued early Thursday (April 10), USA Board Chairman Robert Peiser said a “Stockholders’ Rights Plan” approved in November 2012 had served its purpose by protecting the company during a vulnerable time so the company could “ execute our turnaround without unnecessary distractions, including unsolicited and inadequate takeover offers.”

The remainder of Peiser’s statement noted: "Over the past 18 months, under the leadership of President and CEO John Simone, we expanded our senior management team and began capitalizing on USA Truck's blue-chip customer base, dedicated employees and substantial assets. With the turnaround well underway, and with our stock price having appreciated well above the price existing at the time of the Plan's adoption, the Plan has served its intended purpose. The Board's decision to terminate the Plan demonstrates our confidence in the Company's management team, ongoing strategy and employees."

USA Truck hired John Simone in February 2013 to design and implement a turnaround plan for a trucking company had posted four consecutive years of losses. Simone has more than 30 years of experience in the industry. He’s worked with freight companies such as UPS, Ryder, and Greatwide Logistics. Most recently, he was the CEO of LinkAmerica. 

Enacted in November 2012, the sought to block a company or individual from owning more than 15% of USA Truck shares. The plan – essentially a poison pill provision – also put in place a 10-day “redemption period” to give USA Truck officials “the opportunity to negotiate” with anyone who seeks to buy shares beyond the 15% cap.

USA Truck survived a late 2013-early 2014 hostile takeover attempt by Phoenix-based Knight Transportation in which the poison pill plan did prevent Knight from acquiring enough shares to force the acquisition. Before Knight and USA Truck agreed on Feb. 4 to a standstill in the takeover action, Knight held 11.3% of USA Truck shares (NASDAQ: USAK).

Brad Delco, a transportation industry analyst with Little Rock-based Stephens Inc., said the USA Truck Board decision makes sense.

“It is probably a prudent move for the Board to acknowledge that the use of the poison pill served its purpose, and now they see an ability to go forward with a management team that is having some success in its turnaround effort, and the stock is at a price that they don’t think it could essentially be stolen at an unfair value,” Delco explained.

Stephens Inc. has a market position USA Truck, and does investment and non-investment business with the company.

The value of the company plummeted in 2012 when the share price hit a low of $2.80 on Nov. 6, 2012. Following the September 2013 takeover push by Knight, USA Truck shares have steadily risen, and closed on Wednesday (April 9) at $15.82. The market appeared to like removal of the poison pill provision. Share prices in early morning trading set a new 52-week high of $16.99, and the price moderated to around $16.60 by early afternoon.

The plan allowed shareholders the right to “extinguish” the plan during the 2014 annual meeting. Historically, poison pill plans have not been popular with the large institutional investors that often own a large percentage of a company’s equity. By removing the provision before a shareholders’ vote, USA Truck management avoids a shareholder vote on the issue at the upcoming shareholders’ meeting.

Simone acknowledged that the provision “likely” would have been voted down, but added that the provision worked as it was supposed to by preventing the company from being acquired when the stock price was so low.

“The move is a sign of the confidence in our turnaround,” Simone told The City Wire. “This is a textbook case for how the pill is designed to work. ... We still have a lot of work to do, but the plan is working and the stock price has reacted.”

Large shareholders remain interested in what’s next for USA Truck. South Africa-based Stone House Capital, which owns 14.7% of USA Truck shares, has been in direct talks with “with senior management and members of the board of USA Truck regarding various matters related to the company, including discussions regarding the its operations, business, strategies and strategic direction,” the investment company noted in a federal filing.

The company said the ongoing discussions “have reviewed, and may continue to review, options for enhancing shareholder value through various strategic alternatives, including highlighting and maximizing the value of Strategic Capacity Solutions, the USA Truck's freight brokerage division, capital allocation, and general corporate matters.”

Although metrics have improved for the company in recent quarters, USA Truck still posted a net loss of $9.11 million in 2013. While an improvement compared to the net loss of $17.671 million in 2012, it marked the fifth consecutive year of losses for the trucking company.

The Easter Bunny is a welcome sight for retailers hoping to shake off winter blues. One of the largest holiday spends of the year, Easter shopping is expected to top $15.8 billion this year, according the National Retail Federation.

That said, consumers won’t indulge themselves for this first holiday of spring. According to NRF's Easter spending survey conducted by Prosper Insights & Analytics, the average American celebrating the holiday will spend an average of $137.46 on apparel, food, candy, gifts and more, slightly less than the $145.13 spent last year. 

“The winter doldrums left consumers with a lot of pent-up demand, and though many Americans may take a cautious approach to spending on Easter items this year, retailers are anticipating that warmer weather will easily put consumers in the mood to buy bright clothes, holiday decorations and more,” NRF President and CEO Matthew Shay said in the statement.

He said retailers look forward to increased customer traffic in stores and online, and will roll out promotions on everything from garden supplies and patio sets to apparel and grocery items as they help their customers prepare for the holiday.

The study also showed 3% fewer Americans plan to celebrate this year. But, those families planning a Sunday Easter dinner or brunch out will spend an average of $43 on the meal, which should result in $5 billion in aggregate sales.

Easter traditionally marks the shift into spring and boosts apparel sales in the process. Consumers are expected to dole out $2.6 billion in new Easter clothes for their kids.

Additionally, nine in 10 consumers celebrating will stock up on Easter candy, spending $2.2 billion on their children’s favorite sweet treats. Families also will spend on gifts ($2.4 billion), flowers ($1.1 billion) and decorations ($1.1 billion).

Pam Goodfellow, director at Prosper Insights, said many Americans look forward the holiday, but they don’t plan to break the bank to celebrate. The survey found consumers are trimming back spending on food, clothes and gifts, compared to last year.

Ken Perkins of Retail Metrics Inc., said March same-store retail sales rose 3.5% from a year earlier, beating expectations for a 2.5%. But when stripping out a surprisingly high 5% sales upswing at Costco, which tends to close on Easter, overall retail sales increased just 1.6%.

Because of the the slow start to the spring selling season, “April results take on added meaning this year,” Perkins noted in his report.

He said retailers are making strong marketing pushes to woo consumers into their stores or virtual sites hoping to rebound from a long winter season.

Retailers like Wal-Mart have aggressively marketed with e-mail “Baskets of Savings” blasts to consumers for several weeks. Apparel stores Belk and Old Navy have been sending daily online coupons for the past three weeks on deals for dresses, shoes and other spring clothing. J.C Penney, Kohl’s have been all over social media touting Easter values.

The Fort Smith regional metro jobless rate fell to 7.4% in February, but the size of the regional workforce and number of employed trailed that of February 2013. The February jobless figure also marked 62 consecutive months the rate has been at or above 7%.

Metro employment of 119,041 was better than the 117,664 in January, and was down slightly from the 119,799 in February 2013, according to figures released by the U.S. Bureau of Labor Statistics.

Seven of the eight metro areas in or connected to Arkansas had a jobless rate decline in February compared to January, with only the Memphis-West Memphis area unchanged at 8.4%. Two areas had jobless rate increases (Pine Bluff and Texarkana, Ark.-Texas) compared to February 2013, and the remainder were lower than their respective February 2013 rate. For perspective, 90.8% of the 372 U.S. metro areas had year-over-year-over-year jobless rate declines in February, while 87.5% of Arkansas’ eight metro areas posted year-over-year declines.

During February, the lowest metro jobless rate in the state was 5.6% in Northwest Arkansas and the highest rate was 10.2% in the Pine Bluff area.

FORT SMITH METRO NUMBERS
The size of the Fort Smith regional workforce during January was 128,558, up from 127,557 during January, and down from the 130,739 during February 2013. The labor force reached a revised high of 140,253 in June 2007.

Unemployed persons in the region totaled an estimated 9,5,17 during February, down from the 9,893 during January, and more than 13.5% below the 10,940 during February 2013.

The Fort Smith area manufacturing sector employed an estimated 18,200 in February, unchanged compared to January, and above the 18,100 during February 2013. Sector employment is down almost 36% from a decade ago when February 2004 manufacturing employment in the metro area stood at 28,400. Also, the annual average monthly employment in manufacturing has fallen from 28,900 in 2005, 19,200 in 2012, and to 18,300 in 2013.

Jobs in the Trade, Transportation and Utilities sector — the region’s largest job sector —  totaled 24,000 in February, down from the 24,100 in January, and above the 23,400 during February 2013. Employment in the sector reached a high of 25,700 in December 2007.

Employment in the region’s tourism industry was 9,000 during February, down from 9,100 in January and above the 8,900 in February 2013. The sector reached an employment high of 9,800 in August 2008.

In Education & Health Services, employment was 16,400 during February, unchanged from January and below the 16,900 during February 2013. Annual average monthly employment in the sector has steadily grown since 2005 when it reached 14,000. In 2012 the average was 17,000, but fell slightly to 16,800 in 2013. Employment in the sector reached a record 17,300 in October 2012.

In the Government sector, employment was 19,400 during February, up from 18,800 in January and unchanged compared to February 2013.

NATIONAL NUMBERS
Unemployment rates were lower in January than a year earlier in 338 of the 372 metropolitan areas, higher in 25 areas, and unchanged in nine areas, noted the broad BLS report.

The U.S. unemployment rate in February was 6.7%, down from 7.7% from a year earlier. Arkansas’ jobless rate was 7.1% in February, down from 7.3% in January and down from 7.5% in February 2013.

Oklahoma’s jobless rate during February was 5%, down from 5.2% in January, and down compared to 5.3% in February 2013. The Missouri jobless rate during February was 6.4%, up from 6% in January but better than the 6.7% in February 2013.

ARKANSAS METRO AREAS
Fayetteville-Springdale-Rogers
February 2014: 5.6%
January 2014: 5.9%
February 2013: 5.8%

Fort Smith
February 2014: 7.4%
January 2014: 7.8%
February 2013: 8.4%

Hot Springs
February 2014: 7.7%
January 2014: 8.1%
February 2013: 8.2%

Jonesboro
February 2014: 7.1%
January 2014: 7.8%
February 2013: 7.3%

Little Rock-North Little Rock-Conway
February 2014: 6.7%
January 2014: 7.1%
February 2013: 7%

Memphis-West Memphis
February 2014: 8.4%
January 2014: 8.4%
February 2013: 9.3%

Pine Bluff
February 2014: 10.2%
January 2014: 10.8%
February 2013: 10.1%

Texarkana
February 2014: 7.2%
January 2014: 7.4%
February 2013: 6.9%

FORT SMITH METRO AREA HISTORY
Past annual average unemployment rates
2012: 7.7%
2011: 8.3%
2010: 8.2%
2009: 7.9%
2008: 4.8%
2007: 5.3%
2006: 4.9%
2005: 4.5%
2004: 5.2%
2003: 5.5%
2002: 5%
2001: 4.2%
2000: 3.7%

Voter opinions on medical marijuana, a new medical college chief, development in downtown Fort Smith, and less harassment in the workplace are part of the April 11 Friday Wire for the Fort Smith region.

NOTES & ANALYSIS
• Herbal medicine
Don’t be surprised when your fellow Arkansans vote in November to add the Natural State to a roster of 20 states that allow some form of marijuana use for medical purposes.

A recent Talk Business-Hendrix College poll of more than 1,000 likely Arkansas voters showed 45% oppose medical marijuana and 45% support the idea.

A ballot item likely to make the Arkansas ballot in November would provide Arkansans the ability to use medical marijuana for debilitating medical conditions with a doctor’s recommendation and to allow patients to purchase medical marijuana at a regulated not-for-profit dispensary.

Are we witnessing something similar to the polling for the 2012 medical marijuana question when a wide margin of Arkansans said they would oppose it? When the votes were tallied after that vote, the question was defeated by less than 3%, and it passed in conservative areas like Sebastian County.

Although polls are anonymous, it may be that poll respondents have a hard time admitting to themselves that they would support medical marijuana. While all drugs come with problems, the decades of brainwashing from government, religious and other societal leaders about the dangers of marijuana is hard to overcome. But when folks get in the poll booth, they may vote more in line with their conscience.

If nothing else, a favorable vote would likely boost the economy in Newton County.

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

• New college chief
Fort Smith attorney Kyle Parker, who has been named president and CEO of the planned Fort Smith-based Arkansas College of Osteopathic Medicine, said Wednesday they “are moving quickly” on what will be a $58 million college that when fully operational will house 600 students.

• Water park progress
The Fort Smith Planning Commission approved a conditional use Tuesday (April 8), removing the final road block in what has been a long and winding road in the city and Sebastian County's attempts to build the $10.9 million Ben Geren Aquatics Center.

• Deed restrictions placed on Whirlpool site
The Whirlpool site in Fort Smith that has been the center of a pollution cleanup has now had deed restrictions put in place, limiting certain future activities at the site for not only Whirlpool, but any individual or company that may purchase the site.

NUMBERS ON THE WIRE
35%: The drop in harassment and discrimination charges filed by the U.S. Equal Employment Opportunity Commission from 2012 to 2013. Industry professionals told The City Wire that the numbers for 2013 were not all that low, but instead equated the drop to an unusually high number of sex-related harassment and discrimination charges filed in 2012.

$3 million: The cost of the new Garrison Pointe West development that officially started construction this week. The project by Griffin Properties of Fort Smith will transform six buildings into a mixed-use property, with 12 luxury apartments, as well as five commercial units on the ground floor. Funding from the project comes from a mix of state and federal tax credits coupled with private capital.

$5 million: Appraisal of land donated by the Fort Chaffee Redevelopment Authority to the planned Arkansas College of Osteopathic Medicine. The initial estimate on the land was $4 million. The college is scheduled to open in the fall of 2017.

OUTSIDE THE WIRE
• Alaska Dispatch to purchase Anchorage Daily News
In what amounts to a stunning media shakeup in the 49th state, the still-young online news organization Alaska Dispatch announced on Tuesday it has signed a deal with the nation’s second-largest newspaper chain to purchase the Anchorage Daily News, a 68-year-old publication with two Pulitzer Prizes.

• Whole Foods takes over America?
Whole Foods' vision is a bold gambit when you consider the state of its competition. Supermarkets lost 10 points of share between 2001 and 2013 to the slew of nontraditional players that have gotten into the food game, according to Nielsen.

WORD ON THE WIRE
“If Democrats can squeeze an extra percentage point or two out of their base or Republicans do the same, it could swing the election if it remains this competitive. It is also interesting to note that the undecided margin in this race has shrunk considerably from six months ago.”
– Talk Business & Politics editor-in-chief Roby Brock, discussing new poll numbers in the race for Arkansas governor in a dead heat

"It is very important that we prepare our campaign and supporters for an onslaught of negative advertising from the opposition and 3rd party groups in the final days of this campaign. I assure you they will leave no stone unturned in an attempt to win this race."
– Clint Reed, a partner at Little Rock-based Impact Management Group, explaining in a memo to Rep. Terry Rice, R-Waldron, what to expect throughout the rest of his primary race against incumbent Sen. Bruce Holland, R-Greenwood

"There are incredibly talented, capable, high achieving – dare I say wealthy – people who don't have a four-year bachelor’s degree. It's not the end all and be all. Now do we need more Arkansans with four-year bachelor degrees? Sure we do. We're last, or second to last, depending (on different rankings). That's unacceptable. We've got to have more. But do we need an increasingly large population of specifically skilled individuals who have helped make our industrial and manufacturing (industry) efficient and productive? Absolutely. It's not either/or, which is the choice I think a lot of folks were laboring under for a long time."
– Grant Tennille, executive director of the Arkansas Economic Development Commission, in a speech to the Fort Smith Regional Chamber of Commerce

The Bank of Fayetteville won’t likely be the last one to file suit against H. Dennis Smiley Jr., who owes more than $4.5 million to about 20 Arkansas banks. The big question is who else may be liable for Smiley’s debts?

Bank of Fayetteville officials believe Smiley’s former employer, Arvest Bank, should pay, claiming the bank allowed Smiley to reportedly pledge the same stock/options plan as collateral. That’s what the bank said it in an April 7 response/countersuit filed against Smiley and Arvest for defaulting on nearly $480,000 in loans made and renewed over the past seven years.

Roughly $215,000 of that debt comes from loans made to HDS Holdings LLC, a business entity of Smiley. H. Dennis Smiley Sr., bank chairman at First State Bank of DeQueen, also is implicated in this case. The Bank of Fayetteville claims he borrowed $50,000 in March 2013 and owes $42,000 of that amount.

There are 20 banks named in Arvest’s interpleading filed with the Benton County Circuit Court on April 2. The Bank of Fayetteville was the first to respond to the interpleading and file a counter complaint against Arvest Bank, Henry Dennis Smiley, HDS Holdings LLC, and H. Dennis Smiley Sr. as trustee of a revocable trust.

The Bank of Fayetteville claims it had secured the loans made to Smiley over the years and produced a Control Agreements to the court as evidence. The Control Agreements list interests in Arvest Bank shares worth an estimated $299,811 and signed by Euva Phillips, senior vice president of Arvest operations on 1/10/2012, 11/09/2010

There was also a Jan. 9, 2012 signed letter by Phillips addressed to the Bank of Fayetteville confirming that the bank held a first and primary assignment of the stock account belonging to Henry Dennis Smiley Jr. These and other documents were included among the 195 pages filed with the court this week.

Jason Kincy, spokesman for Arvest, told The City Wire the bank cannot comment on pending litigation. He said he’s not aware of any further resignations related to the Smiley situation.

"Euva Phillips is currently an active Arvest associate," Kincy noted.

Shortly after Dennis Smiley’s resignation, the Bank of Fayetteville said it asked Arvest to repay the debts owed and backed by the collateral assigned at underwriting. Arvest declined request for payment and filed the April 2 interpleading with Benton County Circuit Court asking the court to decide who gets paid given there are more claims than there is money, according to court records.

The Arvest interpleading placed $552,000 — the value of Smiley’s stock —with the Benton County Court and noted in the filing that Arvest bank stock and options were never to be pledged as loan collateral, something Smiley and other bank officials knew.

However, the Arvest response does not explain the signature of an Arvest official produced by the Bank of Fayetteville that suggests the options were pledged as collateral.

Legal experts told The City Wire that the fastest way to repayment under state law is a “race to the courthouse” – to be the first to get judgments against the debtor’s assets. If that holds to be true, more banks may file suit in the coming days, especially now that Circuit Judge John Scott granted Arvest’s interpleading request on April 4.

Other sources told The City Wire that federal criminal charges are likely to be filed. If a guilty plea is made, and sentenced is passed, fines and restitution could be also ordered. The restitution order would provide a means of repayment of funds received in a fraudulent manner.

A personal bankruptcy filing also is not out of the question given Smiley’s financial insolvency. The bankruptcy courts are an organized way for debtors to liquidate assets for a fresh start or work out a restructuring of those debts. But, debt occurred through fraudulent means cannot usually be discharged by bankruptcy. That was the case in the Brandon Barber bankruptcy proceedings. Barber, a Northwest Arkansas real estate developer, subsequently faced criminal charges after fraud was uncovered during his bankruptcy proceedings. 

Legal sources said it’s more likely banks seeking money from Smiley will get pennies on the dollar after considering what their legal costs will be during what may be a lengthy recovery phase. The Bank of Fayetteville asked the court for full payment from the Arvest bank stock fund or judgments against the debtors until the bank is repaid in full.

PAPER TRAIL
• Bank of Fayetteville loans to H. Dennis Smiley Jr.
July 2009
$38,500 loaned to H. Dennis Smiley Jr.

October 2010
$125,000 loaned to Smiley Jr. (refinance, more money loaned)

March 2011
$75,000 loaned to Smiley Jr. (extended in November 2011)

January 2012
$170,000 loaned to Smiley Jr.. (extended to January 2014)

January 2014
$264,847.15 loaned to Smiley Jr. (refinancing the prior loans)

April 2014
Pending status: $263,869.23 owed and payment demand made

• Bank of Fayetteville loans to HDS Holdings
May 2007
$50,000 loaned to HDS Holdings

June 2007
$42,000 loaned to HDS Holdings

October 2007
$100,000 loaned to HDS (refinancing one loan, added funds)

September 2008
$45,393 loaned to HDS (refinancing one loan, added funds)

February 2009
$250,000 loaned to HDS (refinancing prior loans, extended twice)

April 2014
Pending status: $152,507 owed by HDS Holdings and payment demand made

• Bank of Fayetteville loans to HDS Holdings (secured by a Trust)
August 2012
$37,500 loaned to HDS

March 2013
$75,000 loaned to HDS

March 2014
Pending status: $62,503.94 owed and demand made

• Bank of Fayetteville loans to H. Dennis Smiley Sr. (Dennis Smiley’s father)
March 2009
$50,000 loaned to H. Dennis Smiley Sr.

March 2013
The loan maturity extended to 2016

March 2014
Pending status: $42,005 owed and payment demand made.

Source: Benton County Circuit Court records

At the behest of Sen. Jason Rapert, R-Bigelow, Attorney General Dustin McDaniel (D) said he would appeal a federal judge’s ruling on a controversial 12-week abortion ban.

The law was passed in the 2013 legislative session over a veto from Gov. Mike Beebe (D), who declared the measure was unconstitutional.

Federal judge Susan Webber Wright ruled that the abortion prohibition at 12 weeks was unconstitutional and in violation of the 1973 Roe v. Wade decision.

Wright’s ruling did leave a provision of the law intact that requires a doctor to notify a pregnant woman when a fetal heartbeat is detected.

McDaniel said he agreed to appeal the decision as long as a state agency involved in the lawsuit was left financially unharmed and he said he warned the bill’s supporters that they could jeopardize losing the concessions they made by the lower court ruling.

McDaniel issued this note: “I have spoken candidly with Sen. Rapert about the risks and costs associated with an appeal.

“Sen. Rapert has specifically asked me to appeal. I agreed to do so as long as there would be no impact on the budget of the Arkansas State Medical Board, the defendant in this matter, should the state be required to pay attorneys’ fees to the plaintiffs. I have been personally assured by Senate President Pro Tempore-designate Dismang and House Speaker-designate Gillam that the Medical Board budget will not be affected, and that any costs borne from this litigation will be paid through a separate appropriation.

“Therefore, the notice of appeal was filed today and this office will diligently litigate this matter to its conclusion.

“I have also committed to Sen. Rapert, Jerry Cox and the Liberty Counsel our continued cooperation and transparency in the course of this litigation.”

Three more banks filed counter complaints against former bank executive H. Dennis Smiley in Benton County Circuit Court on Friday (April 11).

Smiley was the president of Arvest Bank Benton County until he resigned on March 13. Following his resignation, 20 Arkansas banks have been trying to get repaid the $4.5 million they lent Smiley over the past seven years.

Simmons First National, First State Bank of Northwest Arkansas and First National Bank of Fort Smith are the latest to stake their claims against Smiley and his business interests, alleging fraud and deception to the tune of $440,000. This is on top of the $480,000 being sought by the Bank of Fayetteville, who counter-sued Arvest and Smiley on April 7.

FIRST NATIONAL BANK
First National Bank’s counter-suit filed Friday also names Arvest Bank and Smiley’s father, Henry Dennis Smiley Sr., as co-defendants claiming they are jointly and severally liable for the debt.

The filing submitted by First National Bank included a Securities Entitlement Control Agreement dated Dec. 4, 2013. This agreement pledged Smiley’s Arvest stock account as collateral and was signed by Smiley, the debtor, and Arvest EVP Chad Evans as Arvest’s intermediary. Rob Husong, regional president for First National Fort Smith, signed for the lender.

The documents included a signed letter (Dec. 4, 2013) by Evans on Arvest letterhead that states: “This letter is to acknowledge the first and priority security position of First National Bank on the 4,262.33 shares of Arvest common stock, listing attached ... The Arvest stock has a value equal to the value of the company and would be able to be sold at that price. The valuation as of Sept. 30, 2013 is $393,384.33. The proceeds will not be released by Arvest without your consent.”

Jason Kincy, spokesman for Arvest Bank, said there have been no other resignations related to the Smiley situation. He declined further comment on pending litigation.

SIMMONS FIRST
The counter claim filed by Simmons First National named HDS Holdings LLC., and Henry Dennis Smiley Sr. of DeQueen as co-defendants. Simmons claims it lent $85,000 to HDS Holdings in May 2008. The debtor was to make 9 monthly payments beginning in June 2008. That loan was extended on March 2009 with $85,000 still owed. It was extended again on April 28, 2010 with $76,744 still owed.

Again in May 2011 and May 2012 the loan was extended with $65,000 still owed each time. The final extension was granted in December 2013 in the amount of $56,936, with quarterly payments required.

Simmons made HDS a second loan for $30,750 in May 2013. Monthly payments were due beginning January 2014. This loan went into default in March and demand for full payment was made.

Simmons asked the court for judgments against HDS Holdings and Henry Dennis Smiley Sr., jointly and severally for $84,816 plus interest.

FIRST STATE BANK (NWA)
Henry Dennis Smiley Jr., Cynthia Smiley and Design for the Home LLC were each named as defendants in the counter fraud claim filed by First State Bank.

Three different loans were made to Smiley by the bank between December 2011 and 2013. The first loan made in December 2011 was for $65,000. The bank required collateral for the loan to which Smiley pledged 3,940 shares of Arvest Bank stock.

An Assignment of Investment Securities document was signed on Dec. 2, 2011, by Smiley as the debtor, with Euva Phillips signing on behalf of Arvest Bank as the senior vice president of operations. Phillips is still employed by Arvest Bank, according to Kincy.

On March 17 there was still $40,450 owed on this loan. The bank has asked the court for judgments in that amount against all three defendants.

One more time Smiley went back to the well and got $76,000 loaned to him in April 2012. This loan became delinquent in March with $38,336 still owed. Again the stock was pledged and a judgment has been sought.

Smiley was able to borrow more money from First State Bank in October 2012 —$87,300. The bank again asked for a collateral pledge of the Arvest shares, which they got. This loan defaulted in March with $80,298 still owed. The bank asked the court for a judgment in that amount.

Count IV in this suit alleges fraud against Smith and his wife Cynthia. The bank said it asked for personal financial statements before the each loan was granted. The Smiley’s estimate their net worth in excess of $1.6 million. In 2012, Smiley told the bank his contingent liabilities were $1.739 million and his assets were $2.467 million. In 2013, the couple reported liabilities of $1.075 million against assets of $3.259 million, according to the filing.

“The Smiley defendants knew they had more liabilities than they represented to the First State Bank in their financial statements. Smiley also knew he did not possess (free and clear) the collateral pledged in all three loans,” the filing states.

DELTA BANK & TRUST
More fraud claims were raised by Delta Bank & Trust in their answer filed with the court on April 11. Delta Bank was the first to file against Smiley Jr. and Sr. for loan default.

The bank has since said “Dennis Smiley Sr. did not sign any of the subject loan documents. Upon information and belief, an individual other than Henry Dennis Smiley Sr. signed his name without his knowledge,” the filing states.

WHAT'S NEXT

Legal experts told The City Wire that if federal fraud charges are filed these complaints could be consolidated into the federal court system. There have been no criminal charges filed at this time, but it has been widely reported that a federal investigation is ongoing. Sources believe there is enough evidence to waive a grand jury seating, moving straight to a plea bargain with the U.S. Attorney’s Office.

Acts of individual employee fraud can protect companies to a certain extent. But, the Federal Deposit Insurance Corporation notes in its regulations that bank management is responsible for preventing and detecting fraud and insider abuse.

“The primary responsibility to prevent fraud and insider abuse rests with the board of directors and senior management.”

Smiley was senior management, but the FDIC states there should be checks and balances in place to circumvent and detect suspicious activities at the executive level.

A legislative-referred proposed constitutional amendment is opposed more than two-to-one by voters, in large part due to a proposed change in the state’s term limits law.

The latest Talk Business-Hendrix College Poll of more than 1,000 likely voters shows that 57% oppose the measure that would curtail gifts and contributions to legislators but allow them to serve up to 16 years in the General Assembly. Only 25% support the proposal and 18% are undecided.

“The term limits addition to this proposal appears to be a deal-breaker for voters as our previous polling has shown,” said Talk Business & Politics executive editor Roby Brock. “Without term limits, ethics reform seems to have widespread support, but that’s not the case with this combo amendment.”

The 2013 General Assembly referred three proposals for voter consideration in the 2014 general election. The ethics-term limits proposal, called “The Arkansas Elected Officials Ethics, Transparency, and Financial Reform Amendment of 2014,” will be on the November ballot.

Q: The legislature also referred a constitutional amendment to voters in 2014. It would ban gifts, meals, and trips provide to legislators by lobbyists except in limited circumstances and would also ban corporations from making contributions to Arkansas state candidates. In addition, it would extend term limits to allow legislators to serve up to 16 years and would create a commission to evaluate whether government officials’ salaries should be increased. If the election were held today, would you vote to approve or disapprove such a constitutional amendment?
25% Approve
57% Disapprove
18% Don’t Know

Currently, a gift or expense to a legislator by a lobbyist must be disclosed if the dollar amount exceeds $50. There is no limit on the amount of money that can be spent by a lobbyist, but it must be fully disclosed on reporting forms to the state.

Lawmakers are also allowed to serve six years (three terms) in the Arkansas House and two terms (eight years) in the Arkansas State Senate under the state’s current term limits law. The proposal would allow for a maximum of 16 years to be served by a legislator regardless of which chamber.

When Talk Business-Hendrix College surveyed this question in October 2013, the poll had similar voter disapproval. Roughly 32% supported the measure then, while 50% disapproved.

In 2012 when a proposal to limit gift giving and strengthen ethics rules was being considered, a Talk Business-Hendrix College Poll showed 69% supported the concept while 18% opposed.

ANALYSIS
Dr. Jay Barth, professor of political science at Hendrix College, helped craft and analyze the latest poll. He offered this analysis of the poll results.

Ethics
Reaffirming our results from our October 2013 survey, Arkansas voters remain opposed to the measure sent by the General Assembly that would do several things: ban gifts, meals, and trips provide to legislators by lobbyists except in limited circumstances, ban corporations from making contributions to Arkansas state candidates, extend term limits to allow legislators to serve up to 16 years, and create a commission to evaluate whether government officials’ salaries should be increased.

The proposal is opposed by a comfortable majority of voters (57% oppose and only 25% supporting). The opposition is consistent across political, geographical, and demographic groups with the minor exception that Democratic voters are marginally less opposed (the opposition rate goes down to 49% among Democrats, among whom there is 33% support).

METHODOLOGY
This survey was conducted by Talk Business Research and Hendrix College on Thursday and Friday, April 3-4, 2014. The poll, which has a margin of error of +/-3%, was completed using IVR survey technology among 1,068 Arkansas frequent voters statewide.

Approximately 9% of the voters in our sample were contacted via cell phone with live callers. This is in response to the increased reliance by voters on cell phones. Additionally, we applied our standard weighting to the poll results based on age, gender, and Congressional district.

Net profits of Lowell-based J.B. Hunt Transport Services declined in the first quarter to $68.664 million, down 6.38% from the same period last year. The logistics giant cited rail service disruptions, a series of winter storms in the Midwest and Northeast and more losses in its trucking segment for the slimmer bottom line.

Wall Street had forecast net earnings at $74.9 million or 63 cents per share. Hunt narrowly missed those projections posting 58 cents per share, weaker than the 61 cents per share recorded in the same period of 2013.

On a positive note, Hunt did improve its top line revenue from a year ago. Total operating revenue for the quarter ending March 31 was $1.41 billion, compared with $1.29 billion last year.

The company sited a 5% load increase in its intermodal segment and robust 29% growth in the brokerage revenues from its Integrated Capacity Solutions segment. The Dedicated Contract Services division also had a strong quarter with revenue rising 15% from the prior year period. Those results were offset by a 9% decrease in trucking revenue amid the ongoing fleet reduction linked to a lack of independent contractors.

“It was evident that the weather in the first quarter, particularly in January and February, played a significant role in both our growth and profitability,” John Roberts III, president and CEO of J.B. Hunt Transport, noted in the release.

He expects better performance for the remainder of this year but said even though the weather disruptions have subsided, there are still increased driver costs, rising insurance and equipment costs that are likely to persist. Roberts said those expenses will have to be recovered with higher bids and customer contract discussions in the marketplace.

“Feedback from our customers about their business expectations for the remainder of the year gives us encouragement that growth should return to our previously announced ranges,” Roberts said.

While the overall freight segment is improving, some analysts believe Hunt shares are trading near the top of their projected range, which prompted a recent downgrade to neutral from Bank of America. Stephens Inc. analyst Brad Delco sees the weather disruption issues as a short term blip, but notes that Hunt lost some potential pricing momentum in the process, which is going to take longer to recover. (Stephens Inc. conducts investment services for J.B. Hunt Transport and is compensated accordingly.)

Delco reduced his full year earnings projections for Hunt to $3.15 per share, down from $3.25 stated earlier. He said this new estimate could prove to be conservative if the truckload market continues to tighten up, which could spill over into higher rates for Hunt’s brokerage division.
 Longer term, Delco is bullish on Hunt as he believes the short term weather impact on Hunt’s stock pricing is an opportunity for investors to increase their stake in the company.

Shares of J.B.Hunt were trading higher on Monday (April 14) following the earnings report. Hunt shares (NASDAQ: JBHT) were active at $73.60, up $2.09 in the morning session. During the past 52 weeks shares have ranged from a low $67.97 to a high $79.89.

MIXED INTERMODAL
Segment Revenue: $835 million; up 5%
Operating Income: $93.2 million; down 4%

Hunt reports its Eastern network realized load growth of 9% and Transcontinental loads grew 2% compared to prior year dispute sluggish metrics in the Midwest.

“We began to realize more normalized customer demand and network balance in March and remain confident our original 2014 growth expectations are realistic. Overall revenue grew 5% reflecting the lower volume growth and a flat revenue per load, which is the combination of customer rates, fuel surcharges and freight mix. Revenue per load excluding fuel surcharge revenue increased 1.2% year over year,” the company noted in  its release.

Hunt said winter weather caused a shortage of about 13,000 loads and ultimately dinged the segment’s operating income by $9 million. Hunt ended the quarter with approximately 67,500 units of trailing capacity and 4,300 power units available to the dray fleet.

DEDICATED CONTRACT SERVICES
Segment Revenue: $322 million; up 15%
Operating Income: $15.6 million; down 29%

DCS revenue increased 15% during the quarter over the same period 2013. But revenue on a per truck per week basis was down approximately 5.7% versus 2013 due to the large number of Midwestern and Northeastern customer accounts affected by the winter weather and a significant increase in unseated trucks in the current period. Since last year the company added a net 1,014 of revenue producing trucks primarily from new accounts.

Operating income decreased by 29% from a year ago. Lower productivity, higher equipment and maintenance costs and increased safety costs from the severe weather affected operating income by approximately $8 million in the current quarter.

INTEGRATED CAPACITY SOLUTIONS
Segment Revenue: $163 million; up 33%
Operating Income: $6.1 million; up 18%


Revenue grew faster than volume due to a change in freight mix driven by customer demand. Contractual business was approximately 59% of total load volume, but only 50% of total revenue in the period compared to 69% and 63%, respectively, in first quarter 2013.

“We were encouraged by the response our ICS business showed in dealing with the tighter truck market created by the weather, rail service disruptions and a very real driver shortage,” Roberts said.

Hunt continues to invest in this segment adding 13% more employees and total branch count increased to 24 from 16 over the same period 2013. ICS’s carrier base also increased 7% compared to first quarter 2013.

TRUCKLOAD
Segment Revenue: $92 million; down 9%
Operating Income: $2.4 million; up 124%

This segment revenue decreased 9% from the same quarter 2013, primarily from a 9% reduction in fleet size and lower utilization per truck from the winter weather in January and February. At the end of the quarter, Hunt’s tractor count was 1,917 compared to 2,011 in 2013.

Operating income for the quarter increased by 124% compared to the same quarter of 2013. Benefits from lower personnel costs, a smaller trailer fleet and gains on equipment sales were offset by increased driver hiring costs and higher maintenance and equipment costs per unit.

“We were encouraged by the trucking segment’s improvements this quarter even as they dealt with a smaller independent contractor fleet that affected their revenue expectations," Roberts said.

The company said productivity in March recovered to March 2013 levels, however driver recruiting challenges will likely remain in future periods.

THE NUMBERS
Total Revenue
Q1 2014: $1.406 billion
Q1 2013: $1.291 billion
9%

Net Income
Q1 2014: $68.664 million
Q1 2013: $73.349 million
-6.38%

Earnings Per Share
Q1 2014: 58 cents
Q1 2013: 61 cents
-4.9%

March was a good month for retailers spurred on by warmer weather and pent-up demand from consumers wanting to shake off the winter blues. The National Retail Federation reported a 1.6% increase in March sales compared to a year ago. These sales exclude autos, fuel and restaurants.

“Consumers shed their winter coats last month for fresh, spring merchandise,” NRF President and CEO Matthew Shay said. “Retail sales increased in most categories and sectors as consumers took to stores to purchase new spring attire and home furnishings in hopeful expectation of warmer weather. Sales should continue to remain positive this spring with the approach of Easter and expected tax refunds.”

The U.S. Census Bureau data, which includes automobiles, gas stations and restaurants rose 1.1% from the prior month to $433.9 billion. This was the biggest increase since 2012. Sales rose a whopping 3.8% from a year ago, according to the commerce department.

“Improving economic conditions and consumer confidence should push consumers to return to spending habits this spring,” NRF Chief Economist Jack Kleinhenz said.

He said March was a rebounding month after tepid sales in January and February. Wal-Mart said recently that its sales also bounced back in March after a roughly January and February. That said, the retail giant expects negative to flat same store comparable sales for this quarter which ends April 30.

Segment Sales Increases (year-over-year)
• Building material and garden equipment sales increased 6.2%
• Clothing and accessories sales decreased 2.3%
• Electronics and appliance sales decreased 2%
• Furniture and home furnishing sales increased 1%
• General merchandise sales decreased 0.2%
• Health and personal care sales increased 4%
• Online retailers’ sales increased 8%
• Sporting goods, hobby, book and music sales decreased 5.5%

Walmart to Go may have just opened its first location in Bentonville March 16, but industry insiders who spoke with The City Wire said what could become another competitor will not cause them to start making changes to the way they do business, at least not yet.

Brandon Richmond, owner of four Family Stops convenience stores in Fort Smith and Van Buren, said the market has already adjusted to other convenience store retailers who got into the convenience store game far sooner than Wal-Mart.

"As it sits, this isn't Wal-Mart's first foray into the convenience store. Now we're assuming they'll come in and blitz the market, but Wal-Mart doesn't concern me as much as Casey's (General Store), Kum and Go and Quick Trips, because they've been doing it a lot longer than Wal-Mart,” he said.

According to Richmond, while Wal-Mart may come in and be very similar to some of the larger competitors he mentioned, customers are primarily looking for customer service and the best price on specific items, such as tobacco.

"For the convenience store customer, price is very (important). When it comes down to cigarettes, that's where we get 70% of our top line revenue. Wal-Mart won't be able to beat us because of state minimums."

Even with the larger outfits that are already buying up land and building convenience stores at breakneck speed, Richmond said often the larger chains are purchasing from the same convenience suppliers as the little guys, meaning prices are nearly identical or even slightly higher.

TECHNOLOGY SUPPORT
Nick Glidewell, director of sales and information technology at Fort Smith-based Glidewell Distributing, said distributors like his are what keeps the playing field level for many of the convenience stores in business today and it is because of the changes that have already been taking place in the market.

"This could be a game changer,” Glidewell said of the Walmart to Go model. “But honestly our industry is changing so fast and the consolidation is just mind-blowing. But we've already been dealing with this for probably about 10 years now."

He said Glidewell Distributors has figured out that technology and smooth operations are what will help small operators compete with the big guys. To drive home the point of how technology is helping his company keep the playing field level for all of his clients while competing with other distributors at the same time, Glidewell pointed to a $740,000 piece of technology his company invested in following the acquisition of its chief rival some 10 years ago.

"One thing that comes to mind is when we went from 60 to 94 (employees following the acquisition of Southern Wholesale), we had people on top of people and mistakes were awful. We bought a computer module for $740,000 and it was just an add on for an existing module that we had. We had a consultant come in and run the numbers. ... That thing paid for itself, I think, in 10 months. It's automating the whole process for the orders coming in and going out for the stores. If we can automate without sacrificing quality or price, then we're doing that and have done so for about 10 years."

SIZE DOES MATTER
While technology has allowed Glidewell and its customers to stay competitive, Richmond said there are other things that simply can't be matched with a large corporation, such as Casey's General Store, with more than 1,800 locations nationwide. Among the benefits of having such a large footprint of stores is the ability to transport much of the company's own product using internal infrastructure, versus paying a shipper. He said companies like Casey's are also able to hedge on fuel, meaning they can often times acquire the same fuel that a competitor sells down the street at a cheaper wholesale price.

"Casey's has the ability to buy on the mass scale with fuel. They buy fuel credits and exercise those to get gas cheaper than I can buy it," Richmond said. "They pay themselves to haul it, where I pay a hauler. So they make 4 or 5 cents more per gallon. They make 5 cents a pop more than I am, even though we sell the same product."

What would be a game changer, he said, would be for Wal-Mart to take a similar approach and start transporting its own fuel, should the company expand to a large number of convenience stores.

Even so, the cost savings are not always there for large retailers like Wal-Mart, said Steve Ferren, executive vice president of the Arkansas Oil Marketers Association, a group that includes Kum and Go, as well as El Dorado-based Murphy Oil.

"It's not whether I pull my own product or not, it's my cost of delivery," he said. "If I can find someone to deliver it from a terminal to store cheaper than I can do it myself, it's about the cost of delivery."

He said groups, including Murphy, have been known to continue hiring a hauler even though they may have their own freight line.

"But if you watch, you'll see all sorts of common carriers pulling into Murphy Stores. One reason it is such large volume to do it yourself."

THE LOCATION SHIFT
While the cost of shipping fuel to the convenience stores may again even the playing field, convenience store owners are starting to think about what to do should Wal-Mart start encroaching on their market.

"If they open across the street, we won't go into a market that Wal-Mart is getting ready to flood," Richmond said.

Ferren said when it comes down to it, no matter how confident some convenience store retailers may be, or what kind of prices wholesalers can offer, competition like what could be coming is never welcome.

"No one wants to go head-to-head with Wal-Mart."

He said what is going to happen will be what Richmond alluded to, which is stores not going in across the street from a Wal-Mart.

But another strategy he said could be seen is that large, urban and suburban areas keep the chain stores, with independent retailers going elsewhere. It's a change he said is already underway.

"The players may be new, but the process has been going on forever," he said. "I don't know that the number of (convenience stores) has changed, although the target market could have changed. If I know I have to compete with a Kum and Go in a larger town, maybe I'll go to a smaller town. ... So maybe it makes people choose locations differently."

As for anyone who may be looking for cheaper prices from Walmart to Go or any of the other large convenience store retailers, Richmond said consumers should not expect major discounts.

"Most single store owners are cheaper than Kum and Go and Casey's. They operate at a lot higher dollar and margin, but we buy from the same places they do. But they ... have the $3 million to build a store."