First quarter 2014 commercial airline enplanements are up 5.36% and 9.1%, respectively, in Northwest Arkansas and Fort Smith, but down more than 6% in Little Rock.

Travelers flying out of XNA during March totaled 51,325, up 4.09% compared to the 49,309 during March 2013. For the first quarter of 2014, enplanements at XNA total 133,785, up 5.36% compared to the same period in 2013. The early 2014 traffic is up 1.77% compared to the same period in 2007 – the year that XNA reached its record enplanement of 598,886. (See XNA enplanement history at the end of this report.)

While they welcome the gain, officials at XNA aren’t sure why traffic began to push more positive in the first quarter.

“We even went back in (February) to look at last January weather thinking it could be  the reason for the jump. It was not,” said Kelly Johnson, director of the Northwest Arkansas Regional Airport. “I think the economy is picking up thus more travel. We hope the trend continues. I have talked with other airport operators and they too are seeing increased traffic at different places around the country.”

Johnson also said the effort continues to recruit more carriers to the airport, but industry conditions are not helping.

“The U.S. has seen 200 airlines come and go and we are now down to four major carriers and just a handful of start-up discount carriers (discount airlines). There are hundreds of airports nationwide doing the same things we are in attempts to get service into their individual markets. We are taking an all-inclusive approach to lure new service into XNA,” Johnson said.

For all of 2013, XNA enplanements totaled 579,679, up 2.58% compared to the same period in 2012. The enplanement growth remained stable through the year, with enplanements up 2.42% at the end of the first quarter of 2013.

Enplanements at XNA totaled 565,045 during 2012, up just 0.4% compared to 2011. Although slight, the gain prevented XNA from posting two-consecutive years of enplanement declines. XNA’s first full year of traffic was 1999, and the airport posted eight consecutive years of enplanement gains before seeing a decline in 2008.

American Airlines remains the dominant carrier at XNA with around 43% of all enplanements during 2013. Delta is second with around 27% of enplanements followed by United Airline at around 15%. The airport has more than 10 service connections with five carriers.

FORT SMITH TRAFFIC
The Fort Smith Regional Airport, served by flights from Atlanta and Dallas-Fort Worth, posted March enplanements of 7,658, up 9.11% compared to March 2013.

Enplanements for the first quarter of 2014 total 20,692, up 9.14% compared to the same period in 2013.

For all of 2013, enplanements at the airport totaled 84,520, down 2.46% compared to the same period in 2012. The decline ended three consecutive years of enplanement gains at the airport. (See Fort Smith enplanement history at the end of this report.)

With 12,171 enplanements for the first quarter of 2014, American Airlines accounts for 58.8% of commercial traffic out of Fort Smith. Delta Air Lines had the remaining market share for the first quarter of 2014.

Enplanements at the Fort Smith Regional Airport totaled 86,653 during 2012, just ahead of the 86,234 in 2011, and marked three consecutive years of enplanement gains.

Total system traffic for American Airlines was 1% for the first quarter of 2014 compared to the same quarter in 2013. Regional enplanements were up 0.4%, while the regular, or “mainline,” traffic was up 1.2% in the quarter.

Delta total system traffic was up 3.5% for the first quarter, and it’s domestic (U.S.) traffic was up 3.8%. However, regional traffic for domestic flights was down 1.4% during the quarter.

LITTLE ROCK NUMBERS
Enplanements at the Bill & Hillary Clinton Airport (Little Rock National Airport) were 88,282 in March, down 6.24% compared to March 2013. Enplanements for the first quarter of 2014 were 231,380, down 6.51% compared to the same period of 2013.

Enplanements in 2013 totaled 1.085 million, down 5.45% compared to 2012. Enplanements in 2012 totaled 1.147 million, up 4.07% compared to 2011. The 2012 numbers ended five consecutive years of enplanement declines at Arkansas’ largest commercial field.

With 68,708 enplanements during the first quarter, Southwest posted the most enplanements of the eight carriers operating out of Little Rock. However, the enplanement count for Southwest was down 17.14% in the first quarter compared to the same quarter in 2013.

System traffic for Southwest Airlines during the first quarter was down 0.2% compared to the first quarter of 2013. The discount carrier also reported that the number of flights during the quarter was down 5.9%.

ENPLANEMENT HISTORY (Fort Smith Regional Airport, since 2000)
2013: 84,520
2012: 86,653
2011: 86,234
2010: 86,129
2009: 78,432
2008: 87,030
2007: 99,127
2006: 94,717
2005: 102,607
2004: 92,928
2003: 90,493
2002: 87,944
2001: 95,419
2000: 104,182

ENPLANEMENT HISTORY (Northwest Arkansas Regional Airport, since 2000)
2013: 581,487
2012: 565,045
2011: 562,747
2010: 570,625
2009: 540,918
2008: 571,845
2007: 598,886
2006: 586,320
2005: 583,940
2004: 511,714
2003: 448,228
2002: 400,063
2001: 374,122
2000: 367,157

Crawford County Judge John Hall and Sheriff Ron Brown took their sales pitch for a new county jail across downtown Van Buren to the city's council meeting Monday night (April 21) before the two men addressed residents concerned about a gun range at the Crawford County Quorum Court meeting shortly after they left the council.

In making the pitch for the new jail to Van Buren city councilors, Hall said the vote to raise sales tax by a total of three-quarters of a cent on May 20 was about "the future of law and order in Crawford County."

"The fact that the court systems, law enforcement, the general public depends upon our ability to incarcerate people who (do) bad things and we have to have a place we can put them in that is certified by the state of Arkansas and (where) we can house those people and keep them away from the rest of the population."

The proposed facility is to be built on land just outside of the Van Buren city limits, along U.S. Highway 64, which Hall has said sits in a convenient location easily accessible by law enforcement across the county. The facility requires county voters to approve the sales tax, which would bump the overall sales tax to 10.25% in Van Buren, among the highest local sales tax rates in the United States.

Where the facility along Main Street in Van Buren was built to house 64 inmates, the new facility is designed to house a minimum of 265 inmates and a maximum of up to 307. The new facility will also house a re-located sheriff's office, a courtroom, 911 call center and other amenities, according to Hall, who said the facility would be built for an estimated $19 million with contingency funds of $2 million available should the project run into unforeseen obstacles.

Brown told the council that problems with the jail dated as far back as 1993, adding that the facility was overcrowded from nearly the time it opened. As time has gone on, the problems have only worsened, with the county now transporting inmates to jails in other counties or releasing inmates on signature bonds if they are deemed non-violent offenders.

Alderman Johnny Ragsdale, who was on the Quorum Court when the current facility was constructed, said the facility was built without raising either millage or sales taxes. But Brown said those days are over.

"You know, we're a growing community and when your population grows, everything else grows," Brown said. "This is no different, in my opinion, than a school or a municipal building or a train depot. When your public grows, everything has to grow with it."

To drive home the point of just how overcrowded the jail is, Brown relayed that he has been placed on probation by the state of Arkansas three different times due to jail overcrowding, with a state panel voting three times to shut down the jail. Each time he has been able to buy more time, but he said it could come to a point if the new sales tax does not pass that he could be facing lawsuits, or worse.

"I'm on probation again until August of this year. The letter (from the state) says they're going to ask me to shut it down. If not, they'll file a complaint with the attorney general and it's basically suing Crawford County. Can it happen? Go ask (former) Sheriff (Mike) Allen. Sheriff Allen was brought before Judge Medlock and Judge Medlock said if you go over 64 beds, I'm going to put you in jail."

Beyond what the judge and sheriff said are immediate needs, Hall also pointed to what he said would be economic benefits to a $20 million building project in the county, claiming it would create up to 200 jobs leading to most money flowing through the local economy.

Elected city officials who spoke offered support of the jail tax proposal, with City Attorney Candice Settle calling the situation with the county's jail population "a crisis in our community."

"It will only worsen and I hope people consider that and realize how serious it is," she said.

Mayor Bob Freeman went further, saying that it was a situation that "won't fix itself."

"We have to address the issue. …Let's bite the bullet and let's move on. I applaud the judge and the sheriff for putting together a plan."

The city council approved a motion introduced by Alderman Donna Parker officially supporting passage of the three-quarter cent sales tax on May 20.

In other business, the council:
• Passed a resolution authorizing the mayor to enter into a contract for $82,200 with CEI Engineering Associates to create a comprehensive parks and recreation plan for the city;
• Passed a resolution authorizing and directing the mayor to advertise for bids for property insurance;
• Passed a resolution that provides $50,000 in funding for the Regional Intermodal Transportation Authority for regional economic development; and
• Passed a resolution accepting a bid from Crawford Construction Company for $3.127 million to construct the new Van Buren Senior Center.

At the Quorum Court meeting, Hall was met by a group of residents who claim that a local gun range is putting their families at risk due to wayward bullets landing on their properties and in some cases, entering their homes.

Resident Brenda Yeakley lives near the THOR Global Defense Group shooting range in rural Crawford County and was seeking an order from the Quorum Court that would regulate the business after she said her niece was shot, though Brown said the state crime lab could not rule that the bullet definitely came from a gun being fired on the range at the time.

Addressing the request Yeakley, Charles Baker, the county's legal counsel, said any ordinance that the county could pass that would regulate such establishments or ban them outright would have to grandfather in THOR since it is an existing business.

"The legislature has done exactly what Justice Demonte said earlier — they've made the law in the state of Arkansas (to where) if you attempt to regulate a gun range, then any ranges already in existence when you pass that regulation are grandfathered in. So there's nothing that this Quorum Court could do with this law currently in affect that would change anything at that particular gun range."

Justice of the Peace Carrie Jernigan, whose law partner represents THOR, said it was a slippery slope should the Quorum Court ever try to regulate a business and instead suggested civil action would be the appropriate remedy should residents making claims against THOR want action taken against the company. It was a suggestion that Baker and Hall agreed with and suggested to the residents.

Many of the residents in attendance voiced their discontent with the inaction of the Quorum Court, with about 45 minutes of discussion taking place on the one topic. Hall instructed Baker to further research the remedies that could be available to the Quorum Court before its next meeting in May.

In other business, the Quorum Court approved an appropriation amendment to the fiscal year 2014 budget.

U.S. Sen. John Boozman, R-Ark., is in an Arkansas hospital and was undergoing heart surgery Tuesday morning (April 22), according to a statement from his Washington office.

Boozman, who has served as Arkansas' junior senator since 2011, was scheduled to speak at the ribbon cutting for the Bella Vista Bypass Tuesday but did not appear at the ceremony.

UPDATED INFO:
The following update was sent from Boozman’s Senate office at about 2:30 p.m.:
U.S. Senator John Boozman (R-AR) is in recovery following heart surgery in Rogers, Arkansas.
 
Boozman, 63, was taken to the hospital overnight after suffering from pain in his chest and arm. After running several tests doctors admitted Boozman and performed heart surgery today.
 
Doctors say he responded well to the surgery and are monitoring his recovery. Boozman’s family has visited with him and are hopeful for a full recovery. The family is appreciative of the thoughts and prayers from well-wishers.
 
Please direct any questions to his official office and respect the family’s privacy at this time. Additional updates will be provided by his Senate office once more information is available.

Boozman, 63, was elected to the Senate in 2011 after serving in the House of Representatives since 2001.

Before running for Congress, Boozman served on the Rogers School Board and was a partner in BoozmanHof Eye Clinic in Rogers.

U.S. Sen. Mark Pryor, D-Ark., released a statement following the news of Boozman's hospitalization sending well wishes to Arkansas' junior senator.

"I’m fortunate to call Senator Boozman a good friend and trusted colleague. Today, I lift up his wife, Cathy, his three daughters, and their family and friends in prayer. On behalf of all Arkansans, I’d like to wish Senator Boozman a speedy recovery."

U.S. Rep. Steve Womack, R-Rogers, issued this statement: “My thoughts are with Senator Boozman, his wife, Cathy, and their family. I am grateful John is receiving care from some of Arkansas’s finest doctors and pray that he will make a quick, full recovery so that he can get back to doing what he loves and does so well – serving the people of Arkansas.”

A lifelong Arkansan, Boozman attended the University of Arkansas in Fayetteville, where he was a member of the Razorback football team. Boozman's high school years were spent as a Grizzly, having graduated from Northside High School in Fort Smith.

This story will be updated as more information becomes available.

Americans are looking at more than dollar savings when it comes to feeding their families. A recent food trends report by Cone Communications indicates families are reaching for healthier, more sustainable foods which is forcing changes within the grocery industry.

Although family satisfaction reigns supreme in the study findings, 93% of shoppers surveyed consider health and nutrition important, and 77% said sustainability is key in their decision to purchase. A majority of consumers named specific sustainability initiatives that influence their buying decisions:
• 74% locally produced
• 69% sustainable packaging
• 69% animal welfare
• 67% non-GMO
• 65% protects and renews natural resources

Nearly nine out of 10 survey respondents consider where a product is made when making food purchasing decisions, and two-thirds said they would pay more for food that is produced close to home.

Local food sourcing is linked to environmental and economic benefits which are the two biggest reasons cited by the survey respondents. Americans' convictions are so strong in their commitment to purchase locally produced foods that nearly half (46%) would sacrifice variety to do so, the findings show.

"As the local food movement goes mainstream, it's not just about the 'mom and pop shop' or farm stand. Even large companies have a role to talk about where they source food and the respective impacts on local communities," Alison DaSilva, executive vice president of Cone Communications, said in a statement with the report. "Using local as a broader value proposition helps companies of all sizes talk about the social and environmental benefits of responsible sourcing."

Wal-Mart Stores Inc. has been at the center of the sustainability sourcing movement for a decade now and it continues to tweak its operations and requirements of is suppliers to provide more fresh and more localized products without higher costs to consumers.

‘FOOD UPSTREAMING’
One way Wal-Mart hopes to provide fresher food and beverages is with a program Duncan Mac Naughton recently referred to as “Food Upstreaming.” Mac Naughton, chief merchandising officer with Walmart U.S., shared during a March 19 speech at the IRI Retail Conference that his merchandising team is now focused on food upstreaming work and making some great progress.

“This is really about how we can decrease product cost while we increase product quality. It is that simple, simple in concept, but it takes some work to do. We now have three wine warehouses across the United States in California, in Florida and in Arizona. We are able to take cost out of the distribution center and then reflect that cost back to the customer, MacNaughton said.

Continuing, he explained: “In produce which I am very excited about, we are able to use regional facilities to start to centralize some of the produce supply chain activities, things like culling and things like quality assurance ripening, cutting, packaging and even sorting across an entire crop to say which stores should get which products. We opened our first facility in South Texas in the third quarter of last year and we plan to open five more of these facilities in the coming years.”

Wal-Mart has followed Kroger, Safeway and Texas-based H-E-B in the push to win share in the competitive “fresh war” throughout the grocery industry.

FRESH GUARANTEE
It’s been nearly a year since Wal-Mart unveiled its “fresh guarantee” to consumers promising money back for produce that doesn’t meet expectations.

"We're listening to our customers and delivering on our promise to offer great produce at the most affordable price," said Jack Sinclair, executive vice president of the food business for Walmart U.S. "We are so sure our customers will be pleased with the fruits and vegetables they buy in our stores, they can receive a full refund if they aren't completely happy."

Grocery accounts for 55% of the net sales revenue at Walmart U.S., which amounted to $151 billion last year. 

Retail experts like Carol Spiekerman, CEO of NewMarketBuilders, have said that fresh is everywhere because it is often a reason people will travel to a particular grocery store. She adds that playing the fresh game raises the bar for grocers because consumers expecting fresh are unforgiving when they don’t find it as advertised.

Sinclair said consistency would be key to the fresh program’s success, which is why it mandated training for 70,000 of its employees who are responsible for stocking and restocking fresh produce in stores across the country. To improve freshness, Wal-Mart hired produce experts to work directly with farmers in the key growing regions where they have produce-buying offices. They also employ third-party produce auditors at the store level.

Wal-Mart said it has been focused on local farm sourcing since 2010 and ongoing efforts to streamline the supply chain have reduced the number of days produce is in transit to ensue the freshest fruits and vegetables get to the customers.

In the recent quarter, Wal-Mart reported its overall food and consumable grocery marketshare grew by 0.24% despite negative comparable sales attributable in part to SNAP (federal food stamp) benefit reductions. That said, Wal-Mart had mid-single digit positive comp sales in produce, with positive results in other fresh departments including meat, deli and bakery.

Sinclair told analysts in the October meeting in Bentonville that Wal-Mart’s efforts were starting to pay dividends toward Wal-Mart’s goal of $25 billion in “fresh” sales annually. He said the plan involves using a 33% share in consumables as the benchmark. 

To date, Wal-Mart has a 21% share in bananas, which Sinclair said was linked to better sourcing. With just a 9% share in strawberries, he said, Wal-Mart knows there’s work to do.

CONSUMER EDUCATION
"Grocery shopping decisions no longer hinge on price and taste alone. Consumers worry about where their food is made, what's in it and how it affects the environment," DaSilva said. "The stakes are higher for companies to not only provide food options that meet consumers' modern needs but communicate attributes in a clear and transparent way."

Consumers look to companies to help them understand the broader implications of their food purchasing decisions, with nearly three-quarters (74%) stating they want companies to do a better job explaining how their purchases impact the environment, according to the Cone report.

"Although consumers are shopping with an eye toward sustainability, they are equally motivated by personal needs and a desire to improve society," said Liz Gorman, senior vice president at Cone Communications. "Messaging must be two-fold. Companies must clearly demonstrate the impact consumers' purchases are having on the environment, while reinforcing health, taste and quality attributes."

One area of growing concern among consumers is the GMO (genetically modified organisms) debate. Cone’ research found that 84% of the consumers surveyed want companies to disclose information and educate them about GMOs in products because half said they don’t fully understand whether GMOs are good or bad.

Despite this confusion, three-in-five Americans are on the lookout for non GMO-labeled foods when shopping giving the following reasons:  
• 39% believes non-GMO foods are healthier
• 32% worries about the effects on the environment
• 24% questions the ethics behind the use of GMOs

Wal-Mart has stayed virtually silent on the GMO labeling debate after it leaned toward labeling support efforts in March 2013. An industry trade group and grocery competitor have each more recently spoken up.

"The Food and Drug Administration up to now has said that GMOs are safe, but we also recognize that some consumers want more information and companies might want to include GMO information, so we are asking the FDA to outline labeling standards companies can use voluntarily," Pamela Bailey, CEO of the Grocery Manufacturers Association, said in a statement.

Grocery retailer Wegmans also weighed in on the controversial topic of GMOs this week encouraging The FDA to implement a mandatory approval process for new GMO foods and label non-GMO foods.

Wegmans nutritionist Jane Andrews said in a NPR interview on Monday (April 21) it’s a complex issue and the store is trying to better educate its customers.

"Many people assume GMOs are in the produce department," she said. "They’re not, with a couple of exceptions. GMOs are fed to animals that produce our meats, eggs, poultry, seafood. Or it’s commodity crops that go into processed foods."

She said there's no way to tell if even minor ingredients are genetically modified and labeling would involve a paper trail of documentation.

“We think that official approval is important for consumers to know that the FDA has signed on and said this is a safe product,” Andrews said.

When it comes to genetically modified foods, Andrews said the store’s stance on the products is clear — GMOs are safe. However, not everyone is buying it. 

Last month Kroger and Safeway vowed not to sell genetically engineered salmon, joining Trader Joe’s, H-E-B, Aldi and Target.

Dr. Robin Bowen was on Tuesday (April 22) unanimously elected the new president of Arkansas Tech University, making her not only the first female to lead ATU, but also the first female to lead a public, four-year university in Arkansas.

Bowen, a Missouri native who is now serving as a vice president at Fitchburg State University in Massachusetts, was elected the 12th ATU president during a special board meeting on the south lawn of the Ross Pendergraft Library and Technology Center on the Russellville campus.

Bowen, executive vice president and provost at Fitchburg State University (Mass.), will assume the office of president at Arkansas Tech on July 1, 2014. She will succeed Dr. Robert Brown, who will retire after 21 years as Arkansas Tech president on June 30, 2014, and hold the titles of president emeritus and distinguished professor of economics at ATU effective July 1, 2014.

Founded in 1909, Arkansas Tech University serves more than 11,000 students on its campuses in Russellville and Ozark.

Arkansas Tech was named one of the five fastest growing public master’s degree-granting universities in the United States by The Chronicle of Higher Education in the printed edition of its “Almanac of Higher Education 2013” published on Aug. 23, 2013.

Included in the more than 100 programs of study offered at Arkansas Tech are the five most popular among college freshmen --- business, engineering, the physical and biological sciences, the social sciences and teacher education.

“I am both humbled and honored to be standing here before you being named the 12th president of Arkansas Tech University,” said Bowen before a crowd of several hundred students, faculty, staff, alumni and community members on Tuesday afternoon. “I want to thank the members of the search committee and the members of the board. You did a beautiful job with the search.

“I also want to thank President Brown and his wife, Jill,” continued Bowen. “You have been very gracious and I really appreciate everything that you are doing to help make this transition a smooth one. They have truly transformed this campus during their 21-year tenure, and I promise I will do everything within my power to continue that tradition of excellence.”

Bowen joined Fitchburg State University in June 2011 as vice president for academic affairs.

Her achievements at Fitchburg State have included leading a university-wide strategic planning process, increasing financial support for faculty scholarship, working with department chairs to develop a procedure for data-driven decision making and increasing the diversity of both the faculty and the student body.

Bowen also instituted programs that reached out to first-generation college families and increased retention among students with identified socioeconomic barriers to higher education.

Her track record in academic innovation at Fitchburg State includes facilitating the development of new programs in chemistry and game design. She collaborated with faculty to revamp developmental mathematics on campus and participated in an effort to develop the Common Community Read program to serve both the institution and the surrounding community.

Bowen added the titles of executive vice president and provost at Fitchburg State in July 2013. Her additional duties in that role have included representing the president in various external and internal activities, participating in local, state and national legislative affairs and reorganizing the administrative structure such that Fitchburg State now has four academic deans who oversee the academic departments.

Prior to her time at Fitchburg State, Bowen worked in administration at Donnelly College (Kan.), where she was interim provost and vice president for academic affairs; Washburn University (Kan.), where she was vice president for academic affairs; and Rockhurst University (Mo.), where she was dean of the School of Graduate and Professional Studies and associate dean of the College of Arts and Sciences.

Bowen has held faculty appointments at Texas Tech University, the Kansas University Medical Center, Rockhurst University and Washburn University.

A native of Carl Junction, Mo., Bowen earned a bachelor’s degree in occupational therapy from the University of Kansas and a master’s degree in rehabilitation counseling from the University of Arkansas. She received her doctorate in higher education administration degree from Texas Tech University.

Bowen and her husband, Doug, are parents of three children: daughters Alexa and Brynn and son Brock.

Two closely watched freight reports indicate positive movement in the U.S. economy, but also note that “signals are still mixed,” and that truck tonnage gains in 2014 are not likely to be as strong as they were in 2013.

The American Trucking Associations’ Truck Tonnage Index was up just 0.6% in March after a 1.9% gain in February. For the first quarter of 2014, the index is up 2.3% compared to the same period in 2013, but was down 2.5% compared to the fourth quarter of 2013.

The not-seasonally adjusted index, which represents the real change in tonnage hauled by the fleets, was 12.1% below the previous month.

“Tonnage continued to claw its way out of the hole that was dug in December and January,” ATA Chief Economist Bob Costello said in his monthly report. “However, with a cumulative gain of 2.5% during the last two months, we still have a way to go to offset the total loss of 5.2% in December and January.”

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

Trucking industry fundamentals “look good,” but the pace of growth seen in 2013 may not continue into 2014.
 
“While it will take time to regain what was lost due to weather and other factors, like a potential inventory correction in the first quarter, I remain optimistic for 2014; however, don’t expect a 6.3% annual gain in truck tonnage like during 2013,” Costello explained.

The Cass Freight Index reported that shipments were up 0.4% compared to March 2013, but up 6.6% compared to February.

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

Rosalyn Wilson, a supply chain expert and senior business analyst with Vienna, Va.-based Delcan Corp., also noted in the Cass Freight report for March her uncertainty about the pace of growth in 2014.

“All in all, lots of strengthening in the economy, but taking everything into consideration the signals are still mixed. It will be interesting to see if we can continue to climb up or if we will keep with the trend of recent years and stumble in the second quarter,” Wilson noted.

Wilson’s report included the following points.
• “Shipment volume and total freight payments continued to climb in March, ending the first quarter of the year on a high note. Bad weather continued to plague many parts of the country, but transportation seemed to be less affected than in January and February.”

• “The number of shipments was 0.4 percent higher than last March and 4.6 percent higher than in March of 2012. Railroad carloads rose fairly steadily throughout March, up over 5 percent, while intermodal loadings increased over 3 percent. Truck traffic has also been picking up after falling for the first two months of the year.”

• “New (manufacturing) orders, a bellwether of future freight, rose again in March, up 1.1 percent, after plunging dramatically just two months ago. The backlog of orders jumped 10.6 percent, another indicator that freight volumes should be growing in coming months. Freight volumes in the first quarter were up over 10 percent over Q4 2013, showing the strongest start of the last few years, but it remains to be seen whether the number of shipments will follow the trends of recent years and falter in the second quarter.”

• “Manufacturing and production have turned a corner and are back in expansion mode. Strong new orders and backlog figures bode well for the freight sector. Imports were up in February, especially for autos and parts. Sales of cars and pickup trucks – which are considered a harbinger of recovery in the construction sector – rose sharply in March.”

• “The labor picture appears to be strengthening on the surface, with 192,000 jobs added last month, but Gallup’s measure of the percentage of the adult population that is employed full time (at least 30 hours a week) dropped to 42.7 percent, just slightly above the low point in February 2011. Gallup also puts the seasonally adjusted unemployment rate at 7.5 percent, compared to the Bureau of Labor Statistics’ (BLS) 6.7 percent (the Gallup figure includes the so‐called discouraged workers that fall off the BLS rolls.) Private‐sector payrolls are now higher than in December 2007, the start of the Great Recession.”

Brad Delco, a transportation industry analyst with Little Rock-based Stephens Inc., noted in a March 26 investor note on the less-than-truckload (LTL) industry that tonnage gains should bode well for companies like Fort Smith-based ABF Freight System – a subsidiary of Arkansas Best Corp.

Delco wrote that “tonnage has been stronger than previously expected in 1Q assuming that March plays out well (which indications have suggested they have), and we think commentary regarding this on the earnings calls can help to buoy LTL stocks despite lower-than-expected earnings due to weather.” In the note, which also included support from Stephens’ associate analyst Ben Hearnsberger, Delco said the LTL industry should also benefit from improved pricing.

“Per updates from LTLs at industry conferences and our private company channel checks we believe that tonnage levels have accelerated throughout the quarter and that core contractual pricing for most of the industry has remained strong,” he wrote.

Arkansas Best is scheduled to announce first quarter earnings on May 1.

On the 125th anniversary of Oklahoma City's founding, its former Mayor Kirk Humphreys was in Fort Smith to speak to the city Board of Directors about what his city did to transform from a place that was boring and dead after 5 p.m. to a city that is now among the fastest growing in America.

He said the transformation seen in Oklahoma City started because of MAPS, the city's Metropolitan Area Projects sales tax initiative passed in the early 1990s, which raised the city's sales tax by a penny (from a rate of 7.375% to 8.375%).

According to Humphreys, the sales tax initiative turned the city "that had nothing going for it" into a city with some of the lowest unemployment numbers in the nation, a growing population and amenities that rival larger cities, such as Dallas and Denver.

But in order for the once-decaying city to get to a point of growth and pass the sales tax that has now been approved in some form or fashion seven different times and has resulted in more than $4 billion in private development in the city's downtown core, Humphreys said the city had to have five things:
• A pressing need;
• Unity among elected leaders;
• A mayor with political capital;
• A strategic focus; and
• The ability to deliver on promises made.

The city was able to convince voters of the need and the result has been the construction of a new sports arena that now houses the Oklahoma City Thunder professional basketball team, a new baseball facility, a canal through the heart of the city's former warehouse district, as well as numerous other projects. He said the vision was cast by former city leaders, including then-Mayor Ron Norick.

"You see, our role as city leaders is to set the agenda for our city," he said. "It's our role to say, 'No. Here's where we are, but here's where we could be.' Your city will never go beyond your vision. It just won't. They may catch up with it, but they'll never go beyond it."

Humphreys told the Board that the city had a prime opportunity to do something with the city's riverfront, telling them to "look at what it could be" versus what it is.

Asked what Fort Smith could do to take the lessons from Oklahoma City's rebirth and apply them locally, Humphreys said the city should look at out-of-the box ideas to transform the city.

"I think there's some options that you have with…you could come up with a blended program of public and private partnership," he said, further elaborating on the possibility of Fort Smith doing a half cent sales tax to jump start revitalization efforts.

"What if you said, 'OK. We're going to do a half-penny sales tax.' I would make taxes limited in duration," Humphreys said, adding that the city could potentially double their money by getting local corporations or other entities based in the region to match spending possibly dollar for dollar so that Fort Smith could have more bang with its buck.

While the former mayor was simply floating a theoretical example, he again said its incumbent on the leadership of Fort Smith to be the visionaries and think outside the box.

"I think the big question is not what is our tax rate, but are we satisfied with the way my city is? And if I'm not satisfied with the way my city is, then I've got to do something to change it. You can only economize so much and sooner or later you have to make new investment."

WATER PARK BIDS
In other business, the Board held a special session in order to approve a set of resolutions that approved bids for subcontractors on the Ben Geren Aquatics Center, as well as increased the fee payment to Flintco, the project's construction manager.

While the resolution to approve 29 contracts totaling $6.267 million was passed without opposition, the second resolution to amend the fee schedule with Tulsa, Okla.-based Flintco to $466,530 from an original fee of $371,250 received the no votes of City Directors George Catsavis, Philip Merry, and Pam Weber. The increase, according to Deputy City Administrator Jeff Dingman, was due to the increased cost of construction from $7.5 million to $9.348 million since the original fee agreement was signed.

"The resolution goes on to establish the Construction Manager's Guaranteed Maximum Price of $9,763,852 for all construction phases of the project," Dingman said in a memo to the Board, adding that including fees to be paid to Larkin Auatics and money to pay for furniture, fixtures and a point of sale system bring the total cost of the project to $10.897 million. Between the city and Sebastian County, both governments had committed a combined $10.9 million for the project.

Merry said he was in favor of the project, but did not agree with the move to increase fees to be paid to Flintco before any substantial work had been completed on the project.

"I'm a real believe in a deal's a deal. I'm so for the aquatics (center). I'm for it. But I feel like a deal's a deal. I feel like there had been a commitment made for services to be rendered, there had been a commitment made on what the city should pay and to now give a raise or some sort of increased compensation before we even break ground feels funny. It seems like that'd be something you do at the end if you come in under budget and had a great successful project and wanted to do a bonus. But before we enter into performance to even be had, we're already giving raises."

County Judge David Hudson has told The City Wire that the Quorum Court was not required by law to approve the bids.

Fort Smith City Director Kevin Settle announced Tuesday (April 22) that he would seek a third term on the city's Board of Directors. Settle, who serves as an at-large director and as vice mayor, so far has no announced opponent in his race.

And while rumors have been swirling for months that Settle had his eyes on the mayor's office, Settle said it just wasn't the right move for him.

"I was asked to look at a few things the last couple of years. I felt that with my experience and leadership as a city director, I could best serve the city in that capacity. I felt like that was best for me and my family and the citizens of Fort Smith."

A press release announcing Settle's re-election detailed some of the projects he said were highlights of his second term, which include "residential, industrial and I-49 growth in Chaffee Crossing; continued wet weather, drainage and street improvements; new job recruitment and existing job retention; sewer and water plant treatment expansions; fire station upgrades, expansion and new equipment; Vision 2025, including comprehensive plan updates; reduction in sanitation rates for all citizens, and the progress the City has made in developing regional economic relationships."

While Settle listed a wide range of highlights the city has experienced during his time on the Board, he told The City Wire that there was still a lot more to do.

"Continuing the wet weather improvements — we need to follow through on those and they are vital to our city. Continuation of the comprehensive plan updates — as we heard from the (former) Oklahoma City mayor (Kirk Humphreys on Tuesday, April 22), they put a plan together and stuck to the plan. We want to make sure that we stick with that plan."

He said improvements to the city's parks system, as well as completion of the Ben Geren Aquatics Center, are high priorities, as well.

Settle said improvements are also needed to make the city more business friendly, adding that one way to improve working relationships with businesses and the public at large would be adding a way to apply for business permits online.

As for how Settle has handled the added responsibilities of serving as vice mayor during his second term on the Board, he said it has been a seamless transition.

"It's just what the Board asked to me to take care of when (Mayor Sandy Sanders is) not there. It's just part of being a director, it's part of the city. I take it in stride with being a director. It was asked of me by the directors and I've done it."

Settle, a graduate of Southside HIgh School, WestArk Community College and the University of Arkansas in Fayetteville, works as an engineering manager at Exide Technologies. He and his wife, Terri, have two daughters.

Other announced candidates for Board positions this year include former City Director Don Hutchings, who is running to replace retiring City Director Philip Merry. Mayor Sandy Sanders is seeking a second term in office.

City Director Pam Weber's at-large position is also up for re-election this year, though she has not yet announced whether she plans to seek re-election.

Word Tuesday (April 22) that U.S. Sen. John Boozman, R-Ark., had been hospitalized overnight with chest pain and subsequently had heart surgery caught many in the state off guard. But according to a political science professor in the state, a medical situation such as the one facing Boozman is not unheard of in Arkansas politics.

Dr. Hal Bass, a political science professor at Ouachita Baptist University in Arkadelphia, said the last time a prominent Arkansas politician faced a situation such as Boozman's was in April 1991, when then-U.S. Sen. David Pryor, D-Ark., suffered a heart attack during his last term in office.

He said while Pryor's situation and others across the nation have occurred in the past, there was no precedent for how potentially extended medical leaves are handled, especially in Congress.

"There's no real standard operating procedure," he said, adding that when Pryor suffered his heart attack, he was released from the hospital in about a week, but required several weeks of rest away from the Senate as he recuperated.

Bass also cited the more recent example of U.S. Sen. Mark Kirk, R-Ill., who suffered a stroke shortly into his term in the U.S. Senate and spent much of 2012 on a medical leave from the Senate.

And while it is true that members of Congress are unable to vote while away on leave, the OBU professor noted that there is much more to serving in Congress than just casting a vote or two each week.

"Senators do much more than vote in terms of representing us," he said. "Their staffs will stay on duty, all the constituency service issues would be addressed by staff."

He also said since 2014 is an election year, any recovery time necessary for the 63-year-old Boozman — whose prognosis is unknown, though a statement from his office said he is expected to make a full recovery — would not necessarily take him away from many Senate duties.

"What won't be happening is votes. We're entering a campaign season and Congress won't be in session that much. Given that it is a campaign year, there is no real (legislation that will be passed). But we don't know what the future holds here. If this is a standard recovery time, I don't see the state's voters being enormously inconvenienced or damaged by this. I think the office will stay open. Constituent needs will be served and he'll be able to stay in touch electronically with committees and things like that."

Bass said while Boozman's sidelining due to a medical condition was the first time a situation like this had occurred in Arkansas since Pryor's heart attack in 1991, observers should not be shocked to see it happen again, especially in the U.S. Senate.

"It's not unprecedented," he said. "You're dealing with a population, relatively speaking, of older individuals. The ravages of time, in some fashion, will get us all. But it's not by any means unprecedented for a member of Congress to have time off to deal with medical challenges."

As news reached from Rogers to Washington and all points in between of Boozman's surgery, well wishes have poured in, as well.

U.S. Rep. Tom Cotton, R-Dardanelle, sent his regards, saying he was "grateful to call Senator Boozman a colleague and a friend. My thoughts and prayers are with him and his family. I know that I join all Arkansans in wishing him a full and speedy recovery.”

City Administrator Ray Gosack and Mayor Sandy Sanders of Fort Smith, the state's second largest city and Boozman's home during his high school years, also sent their regards in a statement.

"(My wife) Sandi and I are thankful to hear John expects a full recovery," Mayor Sanders said. "He’s a dear friend personally and he’s a loyal friend to Fort Smith. We count on John’s quiet and effective leadership in Washington, and his wise counsel on matters of importance to our region. We’re certain Cathy and John’s daughters will keep him from rushing back to work too soon. Sandi and I pray for John, the medical staff attending to him, for his family, and his staff during his convalescence."

The Environmental Defense Fund said it is working closely with Wal-Mart Stores and its suppliers to reduce the number of toxic chemicals used in everyday household products.

“It's the largest and most ambitious effort to phase out hazardous chemicals from common household goods, and a prime example of big an impact we can have when we work with major companies,” noted Sarah Vogel, director of environmental health for the EDF.

Wal-Mart consumer product suppliers received a letter two months ago from the retail giant detailing new requirements on phasing out a list of toxic chemicals found in goods sold in Wal-Mart stores. The comprehensive initiative is by far the largest and most ambitious of its kind, according to Vogel. She said it reflects a growing trend in which consumer and wholesale purchasing power are combining to change the chemical makeup of the products we see on store shelves and bring into homes.

The new Wal-Mart chemical policy guide is available at this link on the retailer’s website.

Michelle Harvey, senior manager for corporate partnerships with the EDF in Bentonville, said the policy targets about 10 chemicals of concern in consumer products for replacement with safer ingredients. Harvey notes that this change chiefly affects non-food "consumables," products like baby shampoos, lotions and air fresheners. The policy also expands ingredient disclosure to the public. The effort also requires leadership from Wal-Mart through a commitment by the retailer to align their cleaning products with the EPA's Design for the Environment Safer Product Labeling program.

The partners spent several years developing the policy and deciding how to implement the unprecedented measures across a sprawling global supply chain with hundreds of suppliers. Vogel said the solution had to be robust, credible and transparent. 

For now the policy covers chemical intensive consumable products sold at Walmart U.S. and Sam’s Club stores, including health and beauty aids; cosmetics and skincare; baby care; pet suppliers and household laundry and cleaning products. The partners plan to expand the list in the future.

Harvey noted in her recent blog that the responsibility now falls on the suppliers to deliver the goods, and on Wal-Mart who will have to hold suppliers accountable. She said the EDF is keeping a close watch on the progress.

The Wal-Mart policy targets chemicals that are classified as a carcinogen, mutagen, reproductive toxicant, or is persistent bioaccumulative and toxic. They added any chemical that has produced evidence of probable serious effects to human health or the environment to the “Priority Chemical List.”

Harvey said Wal-Mart has asked suppliers of formulated products to disclose their ingredients since 2006. In the fall of 2013, Wal-Mart zeroed in on the initial list of chemicals it would target for reduction, restriction and elimination.

She said suppliers are being told if their product ingredients contain any of the targeted chemicals, but the retailer has not yet released the list to the public. Harvey said suppliers disclose product formulations, using a third-party reporting system designed to protect proprietary information while still providing the necessary data. 

She said by this time next year, suppliers will have to publicly disclose each product’s ingredients (though not the formulas themselves). To make sure a chemical isn’t replaced with another toxic substance, Harvey said Wal-Mart has taken the step of announcing that “all suppliers are expected to reduce, restrict and eliminate use of priority chemicals using informed substitution principles” that transition to safer chemicals or non-chemical alternatives.

Wal-Mart is not trying to become the next Whole Foods or a local co-op, Harvey said.

“Its chemicals policy is designed for a mainstream market, and it is going to be carried out in concert with the company’s famously relentless emphasis on everyday low prices,” she explained.

Wal-Mart has said it wants to collaborate with the suppliers on this issue. The retailer also has its own private label product formulations to tweak because it is not exempt from the new chemical policy. Harvey said some big suppliers including Colgate-Palmolive and Johnson & Johnson have recently joined longtime front-runners like Seventh Generation in tackling the challenges.

“While there might be some grumbles behind closed doors, the incentives to comply with the policy are considerable. In the end, there’s nothing like a public spotlight on measurable goals to engage the competitive spirit,” Harvey notes.

Former CEO Wal-Mart Mike Duke earned $15.1 million less money in fiscal 2014 than in prior year, but he still collected $5.64 million in compensation as he transitioned into retirement effective Jan. 31.

Duke’s pay was reduced because he did not receive stock awards which are given in anticipation of future financial performance over a three year period, according to Randy  Hargrove, Wal-Mart corporate spokesman. Like his colleagues, Duke’s performance bonus pay slipped on the retail giant’s weaker financials during fiscal 2014.

The 64-year-old Duke earned a base salary of $1.366 million, with a cash bonus of $2.846 million. The bonus was 35% less than earned in the prior year. He also earned $940,000 in deferred compensation pension funds with $490,000 in other paid expenses.

Doug McMillon took over as CEO for Wal-Mart Stores on Feb. 1. His total compensation reported in fiscal 2014 is $25.592 million bolstered by a $23 million stock award noted in this year’s proxy filing with the Securities and Exchange Commission. Hargrove said that stock award is recorded this year, but it is linked to future financial performance. He said that also includes deferred stock awards McMillon earned as CEO of Walmart International.

McMillon’s base salary for fiscal 2014 was $954,408 as CEO of Walmart International. His bonus pay totaled $1.035 million, down 33% from the prior year.

The total compensation for other top executives listed in the proxy filing include:
• Charles Holley, chief financial officer: $8.199 million, bonus of $827,000 – down 33%
• Bill Simon, CEO Walmart U.S.: $13.054 million, bonus of $2.9 million – down 18.4%
• Neil Ashe, CEO Walmart Global eCommerce: $13.178 million, bonus $1.03 million – down 20%.
• Rosalind Brewer, CEO Sam’s Club: $11.66 million, bonus $1.28 million – down 12.5%

In a separate release on Wednesday (April 23), Wal-Mart announced that two of directors will not seek re-election to its board for fiscal 2015. Former CEO Lee Scott is stepping away from board service in June in keeping with the retailer’s succession plan, Hargrove said. 

He said it is customary for the retailer to have one retired CEO on its board. This coming year that will be Mike Duke. Chris Williams, an independent director, is rotating off the board after 10 years of service. Hargrove said this is in accordance with the company’s governance policies.

“Lee and Chris have demonstrated thoughtful and insightful leadership in their service and commitment to the Board,” Rob Walton chairman of the board of directors, said in a statement. “We offer our deep thanks to both for their service to our company, our board and our shareholders.”

Scott served as Wal-Mart’s CEO from January 2000 until his retirement on Jan. 31, 2009. 

“During his 30 years of service, Lee’s extraordinary contributions helped us make significant strides in areas such as sustainability, reputation, diversity and inclusion of all people,” Walton noted. “My dad would have been proud of Lee’s accomplishments in leading Walmart. As they worked together, he understood the valuable role Lee played in managing logistics and the importance of our professional drivers.”

The board will consist of 14 directors, all of which will stand for re-election at the company’s shareholder meeting on June 6. The board candidates are Aida Alvarez, Dr. James Cash, Roger Corbett, Pamela Craig, Doug Daft, Mike Duke, Tim Flynn, Marissa Mayer, Doug McMillon, Greg Penner, Steven Reinemund, Jim Walton, Rob Walton and Linda Wolf.

Wal-Mart has taken it on the chin from union-backed groups for years advocating for higher wages and better working conditions. But one of the more vocal groups, OUR Walmart, said they are hopeful about the management shift and they support the departure of Scott and Williams.

“We hope the board shift and new CEO — along with the recent policy changes to provide more hours and basic protections for pregnant workers — are signs that Walmart will continue listening to its workforce and move in a positive direction for America. We hope that the departure of Mr. Williams and Mr. Scott provide an opening for new, independent voices at Walmart,” Barbara Gertz, OUR Walmart member who is employed by Wal-Mart Stores in Aurora, Colo., said in a statement.

A new report from Wal-Mart Stores Inc. reveals that the retailer has spent $439 million in legal fees and other costs in the past two years associated with investigations of alleged violations of the U.S. Foreign Corrupt Practices Act.

Plenty of eyes have been waiting to see just how much retail Wal-Mart might disclose in its first Global Compliance Report as mandated by the Wal-Mart Board audit committee last year. The report comes in the wake of allegations of bribery and corruption in prior years within the retailer’s international expansion efforts in Mexico, India, Brazil and China.

Wal-Mart said during its February earnings call compliance costs for this year would range between $200 million and $240 million, a figure that also includes the company’s internal compliance overhaul. Last year Wal-Mart spent $282 million on FCPA legal dealings on top of the $157 million costs in 2012, the year the probe in Mexico began and was expanded to India, China and Brazil.

Since the FCPA allegations were self-reported by Wal-Mart in December 2011 and the April 2012 in-depth story by the New York Times, Wal-Mart execs have vowed to investigate the allegations and deal swiftly with any individual who might be implicated. At the same time Wal-Mart moved to strengthen its internal global compliance protocol, focusing on training and procedures to prevent any shortcuts or other possible violations in the future.

A year ago, the board’s audit committee established a set of compliance objectives to be accomplished during the fiscal year ended Jan. 31, 2014. To demonstrate Wal-Mart’s commitment to compliance, a portion of executive compensation could be withheld should executives fail to achieve their compliance objectives. The recent proxy filing showed there was no reduction of incentive pay related to compliance goals not being met.

These compliance objectives can be grouped into three critical areas: people, policies and processes, and systems. The goals were set in collaboration between the audit committee and its counsel and top management, the report notes.

“Compliance with FCPA and other anti-corruption laws remained a key priority for the company. Wal-Mart hired a number of anti-corruption directors and other anti-corruption staff in both its global headquarters and in its International retail markets during the year. The anti-corruption director for each market reports to a dedicated anti-corruption team in Wal-Mart’s home office in Bentonville, which is led by the company’s global anti-corruption compliance officer. Collectively, this global team is charged with conducting due diligence, developing and providing anti-corruption training, and overseeing the implementation of the company’s anti-corruption policies and procedures throughout the world,” the company noted in its report.

Wal-Mart said it continued to work with external anti-corruption compliance experts reviewing, assessing and developing its anti-corruption program during the year. In fiscal 2014, the company spent more than $109 million on enhancements to its global anti-corruption compliance program and financial controls, according to the report. With the addition of new anti-corruption resources, the company said it transitioned some anti-corruption compliance work from external consultants to internal staff during fiscal 2014. This is seen as “critical to promoting the long-term sustainability and capability of the company’s anti-corruption compliance team.”

The company said it added 10 market level chief compliance officers in its international division during fiscal 2014. This was accomplished by new hires and internal transfers. These compliance officers will lead the compliance team in the company’s retail markets. Regional compliance officers were put in place to support the organization within Latin America; Asia; Africa, Canada, and the U.K.

The compliance teams identify and coordinate common standards and procedures, share best practices, provide training and monitoring, and support each other in matters relating to their areas of expertise among 14 subject matter areas from anti-corruption to food safety and trade.

Including the costs incurred in fiscal 2014, the company estimates it will spend more than $100 million on compliance systems enhancements around the globe over the course of the next several years.

Wal-Mart said the federal probe into its international operations will take as long as it takes. The retailer has no control over that external investigation that has been ongoing since December 2011.

Executives implicated in the corruption allegations are slowly fading from the retailer’s daily operations.
• Eduardo Castro Wright was linked the bribery allegations in Mexico, a market that he grew to prominence. Castro Wright quietly retired in July 2012. 

* Tom Mars, former chief administrative officer, exited Wal-Mart in March 2013 after 11 years. He served as general council during the period under scrutiny for FCPA violations. From 2002 to 2009, Mars was involved in an investigation into bribery allegations regarding a Wal-Mart store built near the Mexican pyramids, according to company emails released in earlier this year by Congressional members. Internal emails mentioned in a New York Times April report connect Mars to the matter as the senior corporate lawyer who briefed top executives such as former CEO Mike Duke in 2005 on the Mexican bribery allegations.

* Former CEO Mike Duke, headed up Walmart International during the time under investigation. He retired as CEO on Jan. 31, but remains on the Wal-Mart Board.

* Former CEO Lee Scott was CEO of Wal-Mart Stores during the time under investigation. Scott is exiting his service on the board of directors in June.

No one likely envies the task of Benton County Circuit Judge John Scott as the web of claims and counter suits pile up against H. Dennis Smiley and his former employer, Arvest Bank.

This week three more banks filed answers and counter claims with the court seeking payment on loans they said were secured by Smiley’s Arvest bank stock, via signed control agreements and letters of verification signed by Arvest Bank executives on numerous occasions.

No hearing has yet been slated, there are still several banks with known loans outstanding to Smiley that have not filed an answer with the court regarding their claims.

Coming forward this week was First State of Russellville who filed an answer to the Arvest interpleading claiming the $150,000 loaned to Smiley and Design for the Home LLC on Sept. 21, 2012. This loan was secured by Arvest Bank stock, per control agreements signed by Arvest senior vice president Euva Phillips on Oct. 9, 2012.

In a counter claim filed Monday (April 21), First State Bank sued Arvest Bank, H. Dennis Smiley Jr., Cynthia Smiley and Design for the Home LLC for nonpayment of the outstanding loan balance $145,965 as of April 1. The bank said it sent Arvest Bank a demand for payment on March 17, based on the lien had secured against Smiley's stock account.

First State Bank notes that Arvest Bank executed control agreements with numerous lenders seeking to encumber Smiley's bank stock as collateral for loans and Arvest should have known about Smiley's fraudulent actions to repeatedly pledge the same collateral.

The filing states that Smiley's fraud and the breach of contract by Arvest have cost the bank more than $145,965 and it asked the court to award payment from the proceeds from the collateral stock that in on deposit with the court. The bank also asked for judgments against all the named defendants in the counter claim with punitive damages against H. Dennis Smiley.

Arvest Bank filed a petition April 3 in Benton County Circuit Court saying it hoped to deposit the $551,754.58 from Smiley’s stock interest into the court’s registry in exchange of for a complete discharge of liability. 

Those funds are composed of $427,991.25 from the stock repurchase and $123,763.33 from stock option proceeds accrued up to the time of Smiley’s termination. In the filing, Arvest said there have been multiple claims for the money from Smiley and 20 banks he owes. The bank’s filing said Arvest “cannot determine without hazard to itself which, if any of them, is legally entitled to the proceeds.”

Arvest spokesman Jason Kincy said the bank does not comment on pending litigation, but he did verify to The City Wire that two of the people who allegedly signed the control agreements and letters of collateral verification are still employed at Arvest. He said there has been no other resignation in connection to the Smiley situation.

Integrity Bank of Mountain Home also staked its claim for payment this week with its answer to the court on the Arvest Interpleading.

Integrity notes that it is owed $160,907 secured by Smiley’s Arvest Bank stock. The bank loaned $150,000 to H. Dennis Smiley on July 13, 2012 and obtained a letter from Arvest verifying that Smiley’s 3,940 shares of Arvest common stock would be securing the loan. That letter also was signed by Arvest Bank Senor Vice President Euva Phillips and dated July 11, 2012. 

Integrity Bank claims the Arvest letter misrepresented the true nature of Smiley's ability to pledge the stock for collateral. Without the signed letter verifying the collateral the bank said it would not have made the loan. On Oct. 12, 2012, Integrity Bank modified the loan balance of $145,489 in a new note for H. Dennis Smiley, Cynthia Smiley and Design for the Home LLC. The bank updated its security agreement UCC filing with the Secretary of State.

On June 24, 2013, Design for the Home, H. Dennis Smiley and Cynthia Smiley borrowed $40,100. It was modified in November 2013 to extend the date and require monthly payments, according to the filing. The loan was secured by Smiley's Arvest bank stock and the proper UCC filings were made. The bank asked Arvest for payment based on the collateralized nature of its loan to Smiley. 

First Security bank also filed its answer to the Arvest interpleading stating its case for payment based on the fact it obtained signed control agreements by Arvest executives on numerous occasions regarding the Arvest Bank stock being used as loan collateral for H. Dennis Smiley. First Security did not provide the court with any monetary figures in its 11-page filing regarding the money owed by Smiley. 

First National Bank of Fort Smith recently filed suit against Smiley for non-payment of debt. But in a separate filing to answer the Arvest interpleading on Tuesday (April 22), First National Bank notes the Arvest Bank's interpleader of these funds sited as collateral has breached its fiduciary duty to the lender.

First National asked the court to turn over payment. Based on the UCC filings with the Secretary of State, Smiley borrowed nearly $4.5 million over a four year period, pledging the same collateral each time, unbeknown to the lenders or Arvest Bank the agent holding the collateral.

Signature Bank, Benefit Bank, Chambers Bank, First State Bank of DeQueen and Today’s Bank (formerly First State Bank of Northwest) have yet to file an answer to the Arvest Interpleading.

Arkansas is known as being a large exporter of farm-raised goods, such as rice and soybeans. But another export in Arkansas could be getting a push for incentives during the next legislative session in hopes that it will help expand the industry and make Arkansas competitive with surrounding states.

According to Chad Causey, executive director of the Arkansas Aerospace Alliance, the industry is among the largest exporters in the state and it is responsible for thousands of jobs.

"Companies employ about 9,000 in the industry" in Arkansas, he said.

And the industry continues to grow, in spite of cutbacks in government spending that typically fund contracts with large aerospace and defense contractors.

"The economy in aerospace is turning the corner. We're starting to see growth. Now there was a concern (about the impact) Sequestration (would have) on defense spending, but Lockheed Martin just had between a $250 and $500 million contract in ballistics. So there might be some contraction nationally but we're seeing some big awards for Camden that will bode well for them."

He said for the industry to continue to thrive in Arkansas, the state would have to continually work to have a qualified workforce available to meet the demands of companies already in the area and looking to come to the area.

"We're working with the STEM (Science, Technology, Engineering, and Mathematics) Coalition and two- and four-year schools right now," he said. "But we are also working toward things we can do with the general assembly to further incentivize that workforce and attracting new workforce."

Already other surrounding states offer incentives to attract aerospace industry to their regions. Oklahoma officials recently passed legislation that would extend tax incentives to not only employers, but also employees, in the aerospace industry.

"The aerospace engineer tax credit has helped to create hundreds of new, high paying jobs for skilled Oklahomans," said Republican Gov. Mary Fallin on April 9, the day she signed the extension of the law. "It's also played a key role in maintaining Oklahoma's position as an internationally recognized hub for aerospace business. …When it comes to the growth-potential for aerospace in Oklahoma, the sky is truly the limit. This legislation will help us to attract and retain new business and retain the great jobs made available by industry giants like Boeing and American Airlines."

Causey said the AAA has watched the Oklahoma tax credit closely.

"That's something the Alliance is interested in," he said. "We have to look at the regional approach. We are competing for a trained workforce in the same region they are. We are interested in the ways they incentivize getting a trained workforce. That is something we will watch and consider for the next General Assembly. That is something we will advocate."

Before going to the General Assembly and seeking any sort of incentives or other programs to help the Arkansas aerospace industry, he said a platform is needed.

"We are in the midst of developing an aerospace platform that we would take to the General Defense and Aviation Caucus members to work with them to incentivize further ways that we can attract and retain a trained workforce."

According to Causey, addressing incentives and working with local schools to create programs is just one part of the equation. He said Arkansas needs to continue promoting itself as a regional player in the field, as well, marketing itself to suppliers that serve larger aerospace manufacturers in Kansas, Oklahoma and Texas.

Part of that promotion involves taking Arkansas to the aerospace industry through events like international air shows and industry conferences, instead of expecting the industry to reach out to Arkansas. Causey said plans are already underway for a state delegation to visit an international air show near London in the United Kingdom later this year.

"So we're already in the process of educating the industry that we're located here and open for business. That is our number one export and a lot of people don't know, especially in light of us being a heavy agrarian state, but our number one export to the global market is aerospace goods," he said.

He also said Arkansas is well established in the industry, but it is not enough to just be satisfied, which is why the AAA is going to make its push for legislation and incentives next year.

"That will be a good launching point in the General Assembly during the next few years, the fruit of that labor will be improving the business environment for aerospace companies. We're doing that now and I think Arkansas is a great place for aerospace companies to grow in."

On the day when the Port of Fort Smith officially opened its new railroad tracks to the public, its operator was full of thankfulness for the grant the port received from the state of Arkansas to replace aging rail lines.

Marty Shell, president and CEO of Van Buren-based Five Rivers Distribution and the operator of the Ports of Fort Smith and Van Buren, said it was only with money from the state that the project was been completed.

"We are just showing our appreciation to Sen. (Jake) Files, Sen. (Bruce) Holland, Rep. (George) McGill, and Rep. (Stephanie) Malone. They brought state dollars into the Fort Smith River Valley area for infrastructure needs. So we are showing our appreciation to them for getting that money for us to get that done,” Shell said.

Files, a Republican senator from Fort Smith, said it was a bi-partisan effort by Fort Smith's delegation in the General Assembly that made the replacement of the railroad line at the port possible.

"This funding in particular came from general improvement funds. And it was important – all the representatives and senators from this area deemed it important enough (for funding). We were going to lose jobs and future opportunities for jobs if something wasn't done,” Files explained.

In all, the grant from the state's general improvement funds provided $83,000 in funding "to re-do the railroad tracks at the port of Fort Smith," Shell said. "The tracks were 43-years-old. We put in new tracks at the port back in December.”

Shell echoed Files' explanation that jobs were at stake if the nearly half-century old tracks were not replaced.

"The Port of Fort Smith, especially for the entire Fort Smith region, it's a public port. To have intermodal facilities, it's vital to the region to retain jobs and attract jobs. It's important for the economy. To revamp the rail, that helps us continue with our rail growth."

According to statistics provided by Shell, when his company took over operations of the port, there was no rail traffic operating at the facility. He said as of last year, the number had jumped to 417 rail cars that had traveled through the port's facility and that number should continue to increase with the new tracks.

"The old tracks couldn't handle the traffic we were putting through there. With their help, we were able to put the new track down."

With the new track, Shell is already planning for the future of business operations at the port.

"The plan for the future is to continue the growth for the port with truck, barge and rail. But putting these new rails in, it gave us another 20 to 30 years (before we need additional rail enhancements). Without those four individuals and the city of Fort Smith and the port, we wouldn't see the growth and the rail for that facility. It was a very good thing to happen for this area."

Part of the growth plans, Shell said, include a new 30,000-square-foot warehouse facility in coming years, but he said he couldn't plan on expansion before the rails were replaced.

Files said more growth is likely to come to the river in the coming years, thanks to legislation he and others in the legislature sponsored and pushed through during the 2013 session.

"I was the lead sponsor of a bill we passed to form a tax credit for waterways … to go to public and private entities to do more development along the river. We've got a tremendous opportunity to be a major player in transportation. It's been overlooked."

He specifically mentioned the dredging of the Arkansas River to create a 12-foot deep channel, among many other needs along the river.

"I was encouraged (by the bill's passage)," he said, adding that projects like what was shown to the public Thursday (April 24) would continue happening in the years to come and would be an important part of the state's economy.

"What's good for Fort Smith is good for Arkansas," Files said.

It was a busy legal day in Arkansas’ Capital city, with a voter ID law pushed by Republicans ruled to be unconstitutional, and harsh criticism pointed at the Arkansas Supreme Court by Arkansas Attorney General Dustin McDaniel.

Pulaski County Circuit Judge Tim Fox struck down the state’s voter ID law – Act 595 of 2013 – late Thursday (April 24) declaring the controversial measure unconstitutional because it adds an additional requirement for voters to meet to cast their ballots.

“Act 595 of 2013 imposes requirements on qualified electors beyond the requirements constitutionally required to register to vote,” Fox wrote.

Fox’s ruling also declared the regulations set forth by the State Board of Election Commissioners related to the law “void and unenforceable.”

The lawsuit in the ruling centered around the way absentee ballots are reviewed if voters do not present a valid identification. Last week in a separate complaint, the American Civil Liberties Union of Arkansas and the Arkansas Public Law Center filed lawsuits on behalf of four individuals who said the law prohibiting them from exercising their fundamental right to vote.

The voter ID law was passed by the Republican-controlled state legislature in 2013 and went into effect on January 1, 2014.

Gov. Mike Beebe, a Democrat, vetoed the measure citing the bill’s unconstitutional merits and expensive costs, which were estimated at $300,000. He also said at the time that the measure was “an expensive solution in search of a problem.”

The legislature overrode Beebe’s veto along partisan party lines. Republicans claim the voter ID law would curtail election day abuses, while Democrats contend the bill would discourage voter participation, particularly low income and minority voters.

MCDANIEL AND THE SUPREMES
The Arkansas Supreme Court’s denial of a petition for rehearing in a case brought by Attorney General Dustin McDaniel could threaten all pending and future litigation in the state, McDaniel said Thursday.

Earlier this month, the state’s high court tossed a $1.2 billion judgment against Johnson & Johnson in a Medicaid fraud case involving the drug Risperdal. The Supreme Court ruling overturned a lower court determination.

The 4-3 decision declared that the state misapplied a Medicaid fraud law because the Arkansas Code Revision Commission “substantively altered” changes to a law that was codified 21 years ago.

With the court’s ruling, McDaniel suggested that lawyers must now research original acts and legislative intent versus reading what is in the published legal code.

“The rationale used by the court was completely new and foreign to the case,” McDaniel said in a lengthier interview to air Sunday morning on KATV Channel 7′s Talk Business & Politics. “They now create in every case in Arkansas the potential risk of malpractice for lawyers because they say you can no longer trust what’s printed in the law books.”

McDaniel said the code revision system does not need to change.

“The system is perfectly formulated. The Code Revision Commission is authorized by law, they’re reviewed by the General Assembly. They have linguistics experts and a team of lawyers. Everything they did was perfectly appropriate,” he said.

With the petition for rehearing denied by the Arkansas Supreme Court – also by a 4-3 decision – McDaniel said there are no more legal avenues to pursue on a Medicaid fraud false claims charge. He said he does plan to pursue a new lawsuit regarding a deceptive trade practices claim tied to the Risperdal case.

But he warned that the high court’s interpretation undermines more than 170 years of legal precedent.

“The Arkansas Supreme Court has the reputation of being a results-oriented court. They get whatever result they want when they craft the law to match what they want done,” McDaniel said. “In this case, they came up with something that no one even argued. It undercuts the credibility of our court and it completely takes away from the Attorney General the ability to ever go after a drug manufacturer no matter what they did or how guilty they are. In this case, the drug manufacturer pleaded guilty to a federal felony and paid $2.2 billion in fines and I’m told we’re never allowed to prosecute them or anyone else.”

For anyone expecting fireworks during the District 9 Senate candidate forum Thursday night (April 24), there were none. But there was plenty of policy discussion to keep the forum hosted by the Van Buren Chamber of Commerce going for more than 90 minutes.

The debate started with Sen. Bruce Holland, R-Greenwood, and Rep. Terry Rice, R-Waldron, jumping into the Private Option, which used federal dollars to purchase private health insurance for individuals who would have otherwise qualified for Medicaid coverage.

Rice called it the "biggest elephant in the room" before deriding the legislation that he voted against in the Arkansas House. He discussed how the program is funded by the federal government for the first three years of its existence, with funding falling on state government at that time.

"The payday's coming and I hate for people to be hurt. I asked for this to be put off and let's see what other states do around us. We were the only southern state — no other state that touched us expanded Medicaid. It's because the Supreme Court ruled we did not have to. We were told (by the federal government) we had to do something. We did not have to do something. We did need to reform Medicaid, but the cost is going to be exorbitant, I believe."

Holland, who voted in favor of the Private Option, had a decidedly different take on the oft-controversial legislation, explaining that there were three options available to the state.

The first option he said was to do nothing. The second option was to just go ahead with the federal government's move to expand Medicaid. The third option, he said, was for the state to take the reigns and create the first of its kind Private Option, using funds meant for Medicaid expansion to instead purchase health insurance for the poorest Arkansans, even though some have argued the state should not accept the federal funding since it is paid for with deficit spending.

"It's accepting federal money that the federal doesn't have. Well, I get that argument. I really get that. But there's money that's gone from this state to DC that I think we should take advantage of and allow these people and these hospitals the support through this Private Option. Now there's nothing perfect about it. It's the crappiest lemonade you could make out of these lemons. That's a fact. But doing nothing was not a good option. Expanding Medicaid was a terrible option because Medicaid is a horrible system. The state doesn't have any business in the insurance business, not the federal government."

He also said that working toward a solution, which Holland said he and his colleagues in the General Assembly did during the legislative session, was the right thing to do.

"And if you want to say I made the deciding vote on it, that's fine. I did."

With the forum being hosted by the Van Buren Chamber, government influence in business was a common theme. When asked to explain what he would do to help small businesses, Holland wasted no time pushing for additional tax cuts (Holland has previously endorsed Republican gubernatorial candidate Asa Hutchinson's tax cut plan).

"I believe the best thing we can do for small businesses is to reduce taxes for working people because I believe the more money you put back into working people's pockets, the more money they're going to have to spend at small businesses. And that's a real short answer, but I believe that's the right answer."

Rice leaned on his background in the furniture business when crafting his answer, explaining that he thinks the state has too much regulation that stifles small business growth.

"There's a lot of rules and regs that go through those committees that get passed without you getting to vote on them or the rest of the legislature getting to vote on them. We need to lessen up some regulations. This goes back where the federal government, we all know, has become overbearing and there's nobody going to push back unless the states push back. And that will help business."

He also favored "responsible tax decreases," as well, though he said legislators must look not only at current spending, but any liabilities and future costs, such as the Private Option when the federal government leaves the program to be fully funded by the state.

Education and workforce development was also an issue, with Holland pushing for more trade education versus a traditional college track for high school students. Rice piggybacked on Holland's statement and added the state should start producing skilled workers that the "industry wants."

"Not everybody is made to go to college. We need vocational training for kids who can get out and be happier and make more money than they would if they had a four-year degree in something that they really didn't like. We've got to work with the employment people to make sure we're getting everything we need for the young people and get them ready to go."

Following are quotes from the candidates on other topics:
• Holland on tourism and how it impacts business recruitment: "When we start thinking about recruiting some of those businesses, we need to think about what our towns look like and what they look like to someone else. We all get an impression when we go off to visit another city somewhere. …What we do with tourism, that's the face of that right now. That's what makes people want to come to live here. Those are the front lines of economic development."

• Rice on why voters should choose him on May 20: "Am I the best person? Am I smartest? No. I have a passion to do what I believe what I believe for people and the state, just as I believe Sen. Holland does."

• Rice on legalization of medical marijuana: "If it's on the ballot, I could not support it. I can tell you this, I went through pain management with a couple of spine surgeries. I have empathy for people with pain. I have empathy with people that need help. But I believe the concerns I see of people getting out on the road and that, I guess you're talking about a Colorado-type program, I would not support as a legislator."

• Holland on an increase of the state's minimum wage: "I am not in favor of raising the minimum wage. If we do raise it, let's make it $1,000 an hour. I think that's a bad argument, but I think it's going to hurt small businesses and I'm against it."

The mortal side of politicians, improved traffic at the Fort Smith Regional Airport, the push to build a new jail in Crawford County, and bad bridges are part of the April 25 Friday Wire for the Fort Smith region.

NOTES & ANALYSIS
• Political perspective
During these election cycles when the mere mention of a political issue can ruin a family reunion or Sunday School class and send angry words flying between even the kindest of folks, we forget that those who step out to run for office and put their name on the ballot are breathing, feeling humans.

Or, as Shakespeare might have noted if he were a politician: “If you prick us, do we not bleed? if you tickle us, do we not laugh? if you poison us, do we not die?”

An aortic dissection, a medical issue new to many of us, served – or should have served – as a reminder that the person who may have asked for your vote is mortal. The emergency surgery this week on U.S. Sen. John Boozman (of Rogers by way of Fort Smith and Northside High School and Razorback football) to repair an aortic dissection turned out good for Boozman. As of Thursday (April 24), he was doing remarkably well.

A statement from his Senate office included this paragraph: “His family, who continues to be with him at the hospital, has indicated that doctors are amazed at how quickly Boozman is recovering from the surgery. As he continues to regain strength, Boozman has been conversational with family for long stretches of the day and walking frequently with the aid of medical staff.”

We should know that Boozman’s condition and the emergency surgery performed earlier this week are anything but trivial, routine and easy. The Mayo Clinic notes that a tear in the inner layer of the aorta “is a serious condition,” and that “aortic dissection is often fatal.”

Kudos to the doctors and nurses and other staff who worked on Boozman and continue to work with him, and we hope the good Senator’s recovery will continue to trend as it has in the first few days.

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 ...

• Happy workers
A recent Gallup poll exploring workplace satisfaction has ranked Fort Smith as the fifth most content workforce in the United States, while the Northwest Arkansas workforce failed to rank.

• Traffic patterns
First quarter 2014 commercial airline enplanements are up 5.36% and 9.1%, respectively, in Northwest Arkansas and Fort Smith, but down more than 6% in Little Rock.

• A call for city vision
On the 125th anniversary of Oklahoma City's founding, its former Mayor Kirk Humphreys was in Fort Smith to speak to the city Board of Directors about what his city did to transform from a place that was boring and dead after 5 p.m. to a city that is now among the fastest growing in America.

NUMBERS ON THE WIRE
$15.5 million: Estimated cost for new 58,000-square-foot visual arts building planned for the University of Arkansas at Fort Smith. The university recently held a groundbreaking for the project.

9.14%: Increase in first quarter 2014 enplanements at the Fort Smith Regional Airport compared to the first quarter of 2013.

3%: Gain in Van Buren hospitality tax collections for the first two months of 2014 compared to the same period in 2013. The city collects a 1% tax on lodging and a 1% prepared food tax.

OUTSIDE THE WIRE
• Bad bridges
More than 63,000 bridges across the United States are in urgent need of repair, with most of the aging, structurally compromised structures part of the interstate highway system, an analysis of recent federal data has found. The report, released on Thursday (April 24) by the American Road and Transportation Builders Association, warned that the dangerous bridges are used some 250 million times a day by trucks, school buses, passenger cars and other vehicles.

• Minimum wage push
A wave of efforts to raise the minimum wage at the state and local level will run through November, when voters in eight states could consider ballot measures to raise hourly rates higher than the current $7.25 federal rate.

WORD ON THE WIRE
"I'm on probation again until August of this year. The letter (from the state) says they're going to ask me to shut it down. If not, they'll file a complaint with the attorney general and it's basically suing Crawford County. Can it happen? Go ask (former) Sheriff (Mike) Allen. Sheriff Allen was brought before Judge Medlock and Judge Medlock said if you go over 64 beds, I'm going to put you in jail."
– Crawford County Sheriff Ron Brown about the need to approve a countywide sales tax increase to build a new $19 million jail

"It's certainly against the nature to release it back into the wild, so to speak, understanding that the proposed use is to keep it as such. But when you have the city park land, it's unusual for a city to give up park land just to convey it back to somebody."
– Assistant Fort Smith Administrator Jeff Dingman about a request by the Fort Chaffee Redevelopment Authority to give the McClure amphitheater back to the authority

One more bank has filed suit against former Arvest bank executive H. Dennis Smiley Jr. for loan defaults totaling $70,000 made in 2013. First Federal Bank noted in its complaint filed Thursday (April 24) in Benton County Circuit Court that it made two loans to Smiley last year — $50,000 line of credit and $25,000 term loan.

Both loans were guaranteed by Smiley, personally and the $25,000 loan was also guaranteed by the Henry Dennis Smiley Revocable Trust, dated Sept. 29, 1994, according to the court filing.

Following Smiley’s resignation in March, First Federal said it made demand for payment   which has not been received. The bank asked the court for two judgments amounting to $49,999.96 and $20,000 with interest accruing until payment is made.

Unlike the other 10 banks who have also filed for payment with the court, this time Smiley did not use his Arvest bank stock for collateral. These loans were made with Smiley’s personal guarantee as collateral. 

It is not known what assets may or may not be contained within Smiley’s revocable trust which has been used as collateral in at least two other loans — Bank of Fayetteville $250,000 and Signature Bank amount not disclosed.

Also Thursday, Smiley filed his first response with the court since the onslaught of legal complaints began March 25. Through his legal team, Kenneth Mourton of Ball & Mourton Ltd. of Fayetteville, Smiley answered the complaint made by Delta Bank & Trust. 

The filing notes that the purported signature of his father “H. Dennis Smiley Sr. that appears on the promissory note and guarantee may not be the actual signature of Smiley Sr.” The junior Smiley admitted nothing except that his father’s signature as it appears on the loan documents may be fake.

Henry Dennis Smiley Sr. was a co-maker in $245,126 loan extended by Delta Bank & Trust on Feb. 20. Delta Bank & Trust also sued him for nonpayment of that loan. The senior Smiley filed an answer with court on April 11, saying he did not sign the loan documents, had no knowledge of the loan, nor did he grant anyone authority to sign his name.
http://www.thecitywire.com/node/32707#.U1riIMcs8jc

There have been no criminal charges filed against Smiley, but sources told The City Wire that federal authorities have been investigating the alleged bank fraud for nearly three months.

Smiley is believed to have borrowed as much as $4.5 million using the same collateral and on his own reputation in the banking community. The tangible collateral used multiple times was his shares in Arvest Bank Group, a non-transferable asset, according to Arvest.

Arvest, hit with 20 demands for payment from banks around the state, placed Smiley’s stock proceeds with the Benton County Circuit Court earlier this month. Those assets totaled $552,000. Arvest asked the court to sort out how gets paid what.

It is still unknown how those proceeds will be divided, given they come no where near what is owed. If the court uses the timeline for when the loans were made. First Western  Bank would be at the head of the line, based on the UCC Finance Statements on file with the Secretary of State. First State Bank of DeQueen, would be second in line. Neither of these banks have filed claims with the court as of Friday (April 25).

U.S. Sen. Mark Pryor, D-Ark., received the endorsement of the state’s largest teachers’ union, the Arkansas Education Association, on Saturday (April 26). Brenda Robinson, president of the AEA, said Pryor was a “strong advocate” for public education.

“The Arkansas Education Association is proud to recommend the re-election of Senator Mark Pryor to represent the great state of Arkansas,” Robinson said. “Mark believes that we have the responsibility to our seniors, our veterans and, most importantly, to our children. He has worked steadily to make higher education more accessible for Arkansas students by reducing the federal student loan rate and increasing funding for pell grants. He also supports raising teachers’ salaries to keep and attract the best educators.”

The AEA endorsement is not a major surprise. The teachers’ union frequently endorses Democratic candidates in many contested general election match-ups. It recently endorsed Democrat Mike Ross in the Arkansas Governor’s race.

Pryor touted votes for Title I funding, which boosts spending in school districts with low income students. He also cited his support for special education programs, trade and job-based education, and student loan money.

He singled out votes made by Cotton – his Republican Senate challenger – by highlighting Pell Grant cuts, budget votes that curtailed Head Start funding, and reduced school lunch program dollars.

“When you look at Congressman Cotton’s record on education, it is very different. Earlier this month, he voted to cut $145 billion in education funding. Last year, Congressman Cotton said he wanted to eliminate the government student loan program, even though those are the very same student loans that helped him go to college,” said Pryor.

Cotton’s campaign offered response comments from his mother, Avis, who has worked in the state’s public school system for four decades.

“As a 40-year educator in the public school system, I know that Tom Cotton is the best candidate for voters who care deeply about education,” said Avis Cotton. “Tom is a product of Arkansas public schools and wants to ensure that all of our children get the best education possible. He believes we can do that by making our public schools as strong as they can be and by giving parents the flexibility and opportunity to make decisions that are best for their children.”