Arkansas lawmakers heard Tuesday (June 17) about the next wave of Private Option concepts that will be debated as the program moves forward. The ideas include a version of Health Savings Accounts (HSAs), new cost-sharing measures, and a plan for non-emergency transportation needs for Private Option beneficiaries.

Arkansas’ Private Option takes federal Medicaid expansion dollars and uses it in private health insurance exchanges to subsidize low income workers’ health care coverage. The General Assembly passed the program in 2013 and renewed funding in 2014.

Last week, state officials said that over 187,000 Arkansans — roughly 75% of estimated users — have been determined eligible for the Private Option and just over 172,000 have completed enrollment.

Speaking to the Arkansas Health Insurance Marketplace Legislative Oversight Committee, state officials laid out their blueprints for implementing the three new components of the Private Option program. The concepts were part of the 2013 legislation passed to establish the Private Option, but the changes may not come online until 2015. Federal waiver requests and potential regulatory and legislative clearance will be required to start new aspects of the program.

Independence accounts are basically Health Savings Accounts, which will require Private Option enrollees to financially manage their health care participation. Lawmakers have been pushing for a “consumerism” approach to state-supported health care.

A second component discussed Tuesday centered on cost sharing, which would provide for Medicaid-eligible and Private Option enrollees to make small payments for health care services. The cost sharing mechanism, which will require a waiver from federal Medicaid officials, is expected to allow for an easier transition for Medicaid and Private Option participants to help pay for premiums as they become upwardly mobile with income.

Officials said that the cost sharing effort is also for participants to gain experience paying for health care at a point of service, understand personal responsibility, and accrue funds to help smooth their transition to private market plans when enrollees move out of the Private Option.

The third concept involved non-emergency transportation. When drafting the Private Option and in an effort to contain costs, lawmakers wanted a different rate of reimbursement for transportation for non-threatening medical conditions.

Legislators also heard from Cheryl Smith, the new executive director of the Health Insurance Marketplace (HIM), which oversees the state’s health insurance exchange. Smith said an exchange “at its core is a tool,” like a hammer.

“You can either smash a windshield with it or build something with it,” she said. “It’s neither good nor bad — it’s what you decide to do with it.”

Smith said that going forward the HIM would be “thoughtful, deliberative, methodical” in how to structure the insurance exchange of the future. The group is now looking at different state models and is about to embark on a major study of Arkansas’ needs. She said that a consulting group would be working with HIM to conduct focus groups, interviews, and a statewide survey.

The fate of the Private Option still remains in question, although supporters say there is plenty of data still to be received and additional policy changes to consider before next year’s legislative session.

During the 2015 session, lawmakers can make policy changes to the Private Option, and they will have to reconsider funding to the plan, which requires a 75% vote of support from both chambers of the legislature.

So far this year, the outcome of elections has boosted opponents and caused concern for supporters.

In the Arkansas State Senate, funding for the Private Option passed in this year’s fiscal session with no votes to spare. Two State Senate candidates who supported the Private Option were defeated in their primaries. Their opponents face no general election candidates causing many to predict that the Private Option is two votes shy of passage in the 35-member Senate chamber.

A taste of Oklahoma City's Bricktown is coming to downtown Fort Smith with the news Tuesday (June 17) that Varsity Sports Bar and Grill has been sold to the company behind Oklahoma City-based Bricktown Brewery, according to the new owner who spoke at Tuesday's Central Business Improvement District meeting.

According to Managing Partner Buck Warfield of BT Concepts, Varsity will change names with the change in ownership and will temporarily close later this year was the new owner spends between $500,000 and $750,000 in renovations on the property along Garrison Avenue.

The Fort Smith location will be the first outside of Oklahoma for the company, which also has locations at the Remington Park Casino in Oklahoma City, as well as locations in Edmond, Shawnee and a location opening in mid-July in Owasso.

As part of the renovations scheduled to begin sometime in August — set to coincide with the closure of Varsity — the company will make several changes to the building on the corner of 4th Street and Garrison Avenue. Changes include adding an entrance on Garrison, as well as adding a concept similar to beer gardens on the west side of what is currently the pool room.

"As I stared at the footprint of the building, it became apparent to me that what is now an existing … west side pool room … it seems natural to me to punch through that wall to create that indoor, outdoor dining experience," Warfield told the CBID commissioners during the groups Tuesday morning meeting.

That outdoor space will include an area Warfield billed as a "music space," which is said has become an important part of the Bricktown Brewery developments.

"We'd like to relocate the planters (trees, bushes, etc.) and pour that and create a natural stage. It's just a perfect place for it," he added.

The expansion of the building to the west would include matching brick on the building addition, as well as replanting all landscaping currently in place. New landscaping would be added, as well as garage-like doors to allow the addition to have open air.

The changes also include the iconic neon Varsity sign that has been a fixture of Garrison since the 1990s coming down and being replaced with a similar sign for Bricktown Brewery. The company will also add, though a timeline was not necessarily presented, a mural to the side of the building advertising either Bricktown Brewery or Adelaide Hall, or possibly both, Warfield said.

Adelaide Hall will continue to operate on the second floor of the building at 318 Garrison Avenue, though Warfield said it would be advertised separately from the restaurant, adding that an exterior entrance will be added.

In all, he said staff at the restaurant would increase by about 125%, from its current 30 employees to more than 70 once renovations are complete and the restaurant re-opens sometime in October.

Warfield would not disclose a sale price from current owner Stacy Beal. BT Concepts is operating the facility, he added, and noted that staff would be retained even through renovations.

STREET CLOSURE PLANS
In other business, the CBID heard from City Administrator Ray Gosack about concerns regarding the closure of A Street in the downtown area. The commissioners had proposed closing the street in order to create a more pedestrian-friendly corridor to enhance development already in place in the area, as well as spur further development along the riverfront.

In a memo to the Board, the city administration presented a study from Oklahoma City-based Traffic Engineering Consultants that showed potential problems with traffic flow should A be closed, as well as turning B Street into a two-way street, versus the one-way flow currently present on A and B Streets.

Among the concerns by the engineering firm is a bottleneck that would be created along Riverfront Drive as a result of the street closure.

"Closure of North 'A' Street eliminates or reduces the capacity from a four lane street to a two lane street," wrote Steven Hofener, a principal at TEC. "Although the existing traffic is within acceptable limits for a two lane two-way street, the ultimate widening and traffic increase along Riverfront Drive will create a bottleneck at the proposed two lane, two way North 'B' Street section."

He also notes the head-to-head truck traffic in an urban environment that would be created by the closure, creating more "conflict points," as well as eliminating B Street's current parallel parking.

Gosack told the CBID there was also concern from prospective developers along the river that there was not enough vehicular access for employees and visitors, which would only be exasperated by the closure of A Street, largely driving decisions to locate elsewhere in town. Gosack specifically mentioned the proposed Fort Smith Public Schools Events Complex, which is slated to be built on airport property should a millage pass by a vote of residents next year.

CBID Chairman Richard Griffin was not pleased with the presentation made by Gosack and made his opinion known.

"There's a whole lot of things that can be done (to improve access)," he said. "You've got H Street, you got E Street, you got the Spradling possibilities. And all at once you guys are in here pushing us saying, 'This is a bad idea.'… Why the push back?"

Gosack said it was presenting possibilities to the CBID based on feedback from developers who have chosen to not develop along the river, adding that access has to be available for development to occur.

"If we don't provide adequate vehicle access, we're not going to realize the dream of riverfront development and the community is telling us they want to see riverfront development. So we are here to support development of the riverfront and having development along the riverfront is going to require having vehicle access so that employees, residents, customers, anyone who wants to get in and out of the riverfront can do so conveniently."

Gosack added as part of the discussion that a Kelley Highway extension is being evaluated since a developer mentioned it as a way to bring it to downtown, though there are no plans to do the extension at this time.

At this point, the CBID is moving forward with its original plans for pushing for closure of A Street near the river, though the plan could change depending on options presented to it by the administration and the direction the Board of Directors takes. The Board has ultimate say so with regards to the street closure.

Republican gubernatorial candidate Asa Hutchinson addressed the onshoring of jobs to the United States and what he said was a burdensome regulatory environment during a speech to the Fort Smith Manufacturing Executives Association.

The event, which was closed to the press by the MEA, was attended by business leaders and manufacturing executives from across the region. Hutchinson, speaking after the event concluded, said his speech focused on Arkansas' opportunities in the manufacturing sector.

"Well, I outlined today the great opportunity Arkansas has to bring manufacturing back to this state and to increase manufacturing in Arkansas. It's returning nationally, and when that happens, Arkansas is in a very good, competitive position to reap the benefits of manufacturing coming back to the United States."

He pointed to the recent efforts of Walmart U.S. to encourage its vendors and suppliers to bring jobs back to the U.S. and said his economic development plan for the state of Arkansas would encourage those efforts in the state.

"And so I talked about that opportunity and of course my economic development plan for the state fits right in with that in terms of having a more competitive tax rate in Arkansas so we can recruit industry into the state, a more favorable regulatory environment so we're not being punitive toward business, ad then thirdly, having an emphasis on job skill education that will give us the skills we need in the manufacturing workplace. So those are some of the points I emphasized today."

On the regulation front, Hutchinson said new Environmental Protection Administration guidelines seeking to reduce coal in power production was misguided and would negatively impact Arkansas on both a national and international level.

"… if we over regulate our industry here and the prices go up and all of a sudden, we're back where we were before (with jobs potentially going overseas). So it is a national issue, but it's a specific Arkansas issue because the most burdensome regulations are directed at coal and Arkansas is more dependent upon coal than some other states."

Hutchinson also took the opportunity to respond to the jobs plan announced last week by his Democratic opponent, former U.S. Rep. Mike Ross, saying the plan looked an awful lot like his own.

"Well, it's interesting that he's got a tax reduction plan, I've got a tax reduction plan. He's got a plan for regulatory relief, I've got a plan for regulatory relief. He's got a plan for job skill training, I've got a plan for job skill training. So there's many of the same themes through there, so the differences are in the objectives and how they're implemented and the specificity of the plans."

According to the former 3rd District congressman, his tax plan is more fair to middle class workers in Arkansas than Ross's plan and would provide more relief, making Arkansas more competitive with surrounding states in terms of recruitment of jobs.

"Well, (Ross) can say what he wants to say (about the fairness of his plan), but there's a difference. I'm explaining the difference. And my income tax relief goes to the middle income. We're starting with the middle income, reducing their rates. So mine is immediate relief to the middle income folks but our object in the end is different, and mine is important if we're going to grow jobs in Arkansas. So there's a difference there and he can defend his, but there's a difference. … I think my plan is more fair and will create jobs."

Part of Ross's plan calls for the elimination of sales tax on replacement parts for manufacturers as a way to encourage re-investment in Arkansas-based facilities. But after speaking to the manufacturing executives in Fort Smith Tuesday, Hutchinson said he didn't agree with that proposal in Ross' jobs plan.

"My view is — and I'm speaking to the manufacturers here — sure, they want something that helps manufacturers, but how about the retail market in Arkansas? And how about the farmers? And how about the tourism industry? How about the small business owner? Under my plan, they all get tax relief. But if you enact simply the relief for the manufacturer's replacement parts, that's not across the board and it's not allowing people to make decisions on how they want to invest their money and how they can grow their business."

As part of his speaking engagement Tuesday, Hutchinson also answered questions from the crowd, which he said again touched on regulations. One of the questions, he said, dealt with increased regulation resulting in higher utility costs for manufacturers and how that impacted companies' bottom lines.

"… there's a challenge with logistics here in Arkansas with less highway infrastructure and fewer intermodal facilities that if we can't have some advantage in the utility side, or incentives from the state government, then we can't expand our businesses here and the expansions might go elsewhere. So that was one of the points that was raised that I learned from and I thought was informative."

Hutchinson said there was a gentleman in the crowd from Richmond, Va., the hometown of outgoing Majority Leader Eric Cantor, who recently lost his congressional primary. Asked what could be learned and applied in Arkansas from Cantor's surprise loss, he uttered a phrase repeated many times by politicos.

"Pay attention to your base and all politics is local," he said, adding: "Make sure you understand the frustration with big government and big government solutions."

The House and Senate leaders of a task force charged with addressing soaring school employee health insurance rates said Tuesday (June 17) they believe they will have the votes they need this week for Gov. Mike Beebe to call a special session.

“Assuming we have the votes, (a special session) will happen in the next couple of weeks,” said Sen. Jim Hendren, R-Gravette, the chair of the task force.

Talk Business & Politics first reported on the potential special session and accompanying legislation one week ago.

Two bills have been written and were circulated to the House today. One would remove part-time school employees who work less than 30 hours from eligibility. An earlier draft included part-time state employees, but Hendren said there aren’t enough part-time state employees to generate savings.

In the other bill, employee spouses who have health coverage through another group health plan would not be eligible for school and state benefits. The bill also would require verification of dependent eligibility. It would require employees with high-deductible plans to be enrolled in a health savings account. It also would provide more flexibility in covering gastric bypass and other bariatric surgeries.

“The governor is satisfied with them. Now it’s about the vote count,” said Gov. Mike Beebe’s communications director, Matt DeCample.

Legislative leaders believe they already have that count. Hendren said he hoped to have enough Senate votes by Wednesday to justify calling a session. Rep. Harold Copenhaver, D-Jonesboro, said, “I am confident the House will have enough confirmed members in support of the legislation by the end of the week to move forward with a special session in the near future.”

The task force was created after the Legislature met in a special session in October to address soaring public school employee health insurance rates. Legislators poured $43 million in one-time money into the plan and added another $36 million annually from other sources as a quick fix.

The provision affecting part-time employees is controversial, as it will affect cafeteria workers, school bus drivers and others. Hendren said options are limited. While the Employee Benefits Division has made some changes administratively, they won’t be sufficient to ward off rate increases for teachers without changes in the law.

“I think when people understand that the alternative to a hard decision is a whole lot worse outcome for our teachers, people are going to see that we need to do this,” he said.

Sebastian County is on the hunt for an election coordinator for the third time since November 2013 after the latest hire tendered his resignation Monday (June 16).

In a memo Tuesday (June 17) that gave the media about a two hour notice of a special meeting of the Election Commission meeting, Sebastian County Judge David Hudson said Robert Cowan — who was hired as election coordinator May 23 — had resigned. A memo to the Election Commission and County Clerk Sharon Brooks sent Monday notifying them of the resignation, the judge cited personal reasons for the departure.

"In consideration of family and business interests, the time required for elections coordination is not compatible with Mr. Cowan's schedule and available time," Hudson wrote.

Cowan previously served as vice president of finance at Rheem Manufacturing Company's air conditioning division in Fort Smith, as well as director of finance for United Technologies of Indianapolis and as a regional controller for Procter & Gamble in Greensboro, N.C.

Tuesday's special meeting was an executive session for the commission to interview Suzanne Morgan, who had been a finalist during the last round of interviews when Cowan had been hired. Morgan's resume said she previously served as a business manager for Fort Operating Company of Fort Smith, as well as a special education aid at Van Buren Public Schools and as a legal assistant for a Dallas-based law firm.

Hudson told The City Wire he would not be posting the position again since it was only filled weeks ago, instead depending on the applications and resumes that were submitted during the interview process that led to Cowan's hiring. He added that he would like to quickly fill the position since three elections are upcoming.

"We know at this time that we have two elections scheduled on the same day on August 12, the Fort Smith Library and the Barling city directors. There's three individuals running for city director in Barling. Both of those elections are August 12. Then there's a school election that's in September. … And then you have the November general election. So the meeting today is to consider another individual that we had interviewed and had considered a top candidate for this position so we can move on."

Hudson said he was unaware of any state statute that would require the county to again post the position before it could be filled.

Before the special meeting at 4:30 p.m. Tuesday (June 17), Hudson said he and Brooks had interviewed Morgan and Sebastian County Human Resources Director Steve Hotz confirmed that Morgan had previously been interviewed in May.

Election Commission Chairman Lee Webb told The City Wire he would like to see the Hudson wait before moving to hire a new coordinator, adding that he wanted to make sure the right person was in place instead of having high turnover continue.

One area of contention between Webb and Hudson is Hudson's desire to keep Cowan on temporarily to assist in the transition from himself to another candidate, which could possibly include Morgan. Webb said Cowan has not been on staff long enough to be able to assist in a transition and would instead like to see former Election Coordinator Jerry Huff return in a consulting capacity to assist the election commission in the short term. Huff's retirement set in motion the first attempt to hire now former Election Coordinator David Mansell, who resigned after a series of ballot mistakes. Mansell was subsequently replaced by Cowan.

"I would prefer getting Jerry back. I don't think Bob's up to speed enough on where we need to be at. He hasn't actually completed a complete election by himself other than the runoff, which we had a lot of help with."

During a Tuesday meeting of the Quorum Court, Hudson secured more than $2,900 in funding to pay out accrued leave time and other items from Huff's term. Hudson also stated during the earlier election commission meeting that if Huff were to return, it would have to be in a consultant's role since the state does not allow someone receiving retirement pension benefits from the state to be placed back on the salary.

As for how to solve the problem of the revolving door, Webb did not have a solution, but noted that the job may need to bumped from a part-time, $27,000 per year position to a full-time role with higher pay in order to find a quality candidate should Hudson choose to move to another candidate besides Morgan.

"I believe it's a bigger job than what it's posted as. I think there's a whole lot more to it once someone gets ingrained in it. They say it's not really worth what it's getting paid and takes a lot more time than what Jerry probably ever put down on his time log."

No further action has yet been taken on whether to retain Cowan for the transition, hire Morgan or call Huff back for consulting services. Hotz said more information could be available as soon as next week on what next steps could be taken by the county.

Fort Smith City Director Philip Merry's third attempt to get a review of the city's legal billings and the formation of a committee to review whether the city would be better served by in-house legal counsel or the current arrangement with paying the Daily and Woods Law Firm to provide legal services went nowhere at Tuesday's (June 17) meeting of the Fort Smith Board of Directors.

Merry had previously made an attempt during a regular Board meeting to have the item placed on the agenda, but was sidelined by Mayor Sandy Sanders who said it was not a proper motion since Merry was attempting to add the item at the end of a June 3 meeting.

A study session on June 10 resulted in the item being placed on Tuesday's agenda with a motion by Merry and a second by City Director Pam Weber, though a procedural move later in the week by City Director Mike Lorenz and backed by City Directors George Catsavis, Andre Good, Keith Lau, Mike Lorenz and Vice Mayor Kevin Settle removed the item from Tuesday's agenda.

The only two to vote in favor of adding the item to Tuesday's meeting agenda were Merry and Weber, with all directors with the exception of Good voting against the motion. Good arrived late to the meeting. Settle, who ran Tuesday's meeting in the absence of Sanders, stated all seven directors would have to approve the addition of the item for it to be an agenda item Tuesday. Since the item failed to receive seven votes, Settle said it would instead be placed on the July 1 meeting agenda, though it conceivably could be removed again should four directors contact the city clerk requesting its removal.

In other business, the Board approved a contract worth $1.176 million for Beshears Construction to build a fire training tower facility for the Fort Smith Fire Department at the Fort Smith landfill. According to Fort Smith Fire Chief Mike Richards, the department will use Act 833 funds, which are generated from an insurance premium tax, to build and operate the facility for the department instead of going out of town for training.

The facility would also be made available for a fee to other area fire departments, he added. Other city departments would also likely make use of the building, including the Fort Smith Police Department's SWAT Team, Richards said.

In addition to the initial construction cost, Richards said he was aware that the building would require yearly maintenance and operations expenditures, in some cases having operational costs as a result of outside groups using the facility.

"We're very aware of the fact that there will be some costs involved and we'll have to recover those costs for the wear and tear, but we're willing to work with anyone to do that. One of the important things about this facility is we intend to run it without using any additional general fund money. Once we get the facility built, it's our intention to take our Act 833 money that we receive each year and that's between $80,000 and $90,000, and put that back into the operation of the facility so we don't put an additional hardship on the general fund."

Page 54 of the 2014 Budget Supplement shows that the fire department already budgets $50,770 annually for operations related to training, which Richards said would no longer be spent on outside training once the training tower construction is complete. He again made the point that the operations costs would be completely covered by the Act 833 funding, though salaries for trainers would not come from Act 833. The budget supplement shows a total training personnel budget of $173,150, which includes $137,570 in salaries.

Based on the cost of the structure and the budget for training operations, the fire department would be able to recoup the cost of construction in approximately 24 years.

When Melissa Terry and her husband Flint Richter were children, they grew up on a farm, him near Springfield, Mo. and her in central Arkansas. Their background in farming is one reason they chose to purchase a nine-acre farm in August 2012 that sits in southeast Fayetteville.

Their land is zoned for residential but they are hoping to have it rezoned to agriculture to expand their ability to use the land for agricultural purposes.

“Our goal for our girls (age 6 and 8) is that they grow up knowing how to cultivate, preserve, and prepare fresh, healthy food; how to care for animals; and to find joy in their own powers of observation (such as noticing) sunrises and cool clouds; learning the names of birds, identifying different types of native grasses, plants, trees;  knowing what an heirloom seed is and why that's important, etc.” she said.

Melissa Terry’s family is not alone. Across the United States, including in Northwest Arkansas, the idea of urban agriculture is increasingly popular.

URBAN AGRI LEGALITIES
Laws vary in each Northwest Arkansas town for farm animals on land zoned for residential uses but the two extremes are Springdale and Fayetteville. Springdale does not allow any kind of farm animal (such as chickens) and Fayetteville recently changed its ordinances to allow an increasing number of chickens/ducks and bees, and now goats.

The number of animals from each species that is allowed is based on the plot size. The City of Fayetteville offers a detailed PDF that explains what is allowed under the ordinance, which passed in March 2014.

Bentonville and Rogers allow for bees and four hens. The city requires a permit and an inspection of the property, which must have the necessary housing for the animals and an appropriate sized lot. None of the major towns in Northwest Arkansas allow for roosters (male chickens) because of noise ordinances.

Increased interest has driven the evolving city ordinances, officials from Bentonville and Fayetteville agree.

“I anticipate that (the ordinances) will be under constant review based on what the citizens are telling us they need,” said Troy Galloway, city of Bentonville community and economic development director.

Peter Nierengarten, Fayetteville’s sustainability and resilience department director, said Fayetteville’s recent change in ordinances stems from the desire to help solve the local food distribution issues and allow people to supplement their income and have better access to healthier food. The ordinance changes also include more allowances for people to sell fresh produce they grow themselves from their home.

A grass-roots group in Springdale is working to get ordinances changed to allow chickens in the city limits (on land zoned for residential). They’ve met with resistance from the City Council, which as of this writing had not placed the issue on its agenda.

Tiffany Selvey lives in Springdale and works a 4,000-square-foot garden in her backyard. She’s part of the efforts to get chickens allowed in residential areas.

“In the last several years different people have approached the city council to ask for the ordinance to be changed to allow backyard hens in areas zoned residential. We are the hometown of Tyson and George’s, so it seems given that we could have backyard hens for eggs and pest control. Sadly, that's not the case. In the last few years, when all of our surrounding towns have made ordinances to allow backyard hens, Springdale will not change,” she said. “There are many reasons chickens could be beneficial in residential areas. Food security is an issue in our town, with some of our elementary schools at 90% or more free and reduced lunch rates.”

Continuing, Selvey said: “Those 2-4 eggs a day could make a real difference in the health of our children. Food insecurity aside, chickens provide excellent pest control, feasting on disease-carrying pests such as ticks. They also provide nutrient-rich free fertilizer, which appeals to me for obvious reasons. For those of us buying free-range, organic fed eggs at farmer's markets, we can save a lot of money. The average cost of organic, non-GMO fed chicken eggs, when you raise them at home is around $2 a dozen. And you get free fertilizer.”

Selvey added that there are efforts in town to ask for chickens to be allowed in educational gardens.

In regards to her own garden, Selvey gives credit for that interest to her grandfather.

“He is 80 years old and still maintains a huge garden in my town,” she said. “When I have questions, he's better than the Internet for information. As a child, I remember walking through the garden with him. The magic of growing food started way back then. ... After becoming a mom, I decided that I wanted to make a significant improvement in the health of my family, as well as a dent in the grocery budget.”

The desire to have healthy food is what led Dr. Malcolm Hayworth, an oncologist from Fayetteville, to start raising sheep in the 1980s. His father did the same when Hayworth was growing up in the northeastern United States. Hayworth is technically not in an urban area as his property is just outside city lines. However, he’s one of the area’s original “hobby” farmers and he has wisdom that would help others interested in starting their own urban agriculture program.

For one, make sure to provide veterinarian care for the animals (yes, chickens need to be vaccinated) and also make sure to purchase animals for the purpose they are intended. For example, some sheep are used mostly for meat, which is Hayworth’s purpose, and others are more for wool growth. The same is true for chickens. Some are better for laying eggs while others are better for harvesting.

LOCAL BUSINESS IMPACT
As the interest in urban agriculture grows, so does business for companies that offers supplies and expertise in the field. Farmers Co-op has 14 locations from Mena to Bentonville including Fort Smith, Bentonville and Fayetteville.

CEO Jay Carter said they are seeing a lot of urban agriculture business.

“It’s not just in Arkansas,” he said. “We’re seeing growth (in urban agriculture) across the nation.”

Farmers Co-op offers everything from high quality animal food to plants and raised garden beds. Customers can order chicks through the co-op but goats are not available, Carter said.

Two main reasons are contributing to the rise in urban agriculture, he said. One, more people want non-contaminated food that they know where it comes from. There’s also an increased interest in organic/natural food.

FARMING ORGANIZATIONS
Besides individuals showing more interest in urban agriculture, there’s also a growing number of organizations in Northwest Arkansas dedicated to local, community grown food. Terry is Programs Coordinator for Feed Communities in Fayetteville.

“Our two program priorities are increasing healthy food access and improving healthy food choices,” she said.

Terry emphasizes that the programs are designed to support sustainable food security because if the focus is on the insecurity, the needs will never end.

“In Northwest Arkansas we don’t have a food shortage, we have a distribution shortage,” she said.

Feed Communities works to create networks of service providers to make sure that healthy food is readily available throughout the community.

Tri Cycle Farms is located roughly at Sycamore and Garland in Fayetteville and has operated since 2011. The organization works with volunteers to raise chickens, food and bees. They hope to soon have goats, said Don Bennett, founder/director. They also offer education classes about growing food and how to prepare it.

“We need to address the food insecurity issues with awareness, education and empowerment,” he said. “We’re able to impact the neighborhood and community from the middle of town.”

Van Buren-based Arkansas Lamp has launched a new product line and a new company name to signify the growth the company is experiencing. President Jeff Null of Arkansas Lamp said the company would be changing its name before the end of the week to Arkansas Lighting to coincide with the launch of the company's new line of LED fixtures which include ceiling lamps and wall sconces.

"Instead of being Arkansas Lamp, it's going to be Arkansas Lighting," Null said. "When most people think lamp, they think table or floor lamp. But we're more than that, so we're trying to broaden the perception of what we do."

Null said the new line includes more than the lamps the company started with in 1972 and allows what will now be called Arkansas Lighting to seize an opportunity in the marketplace. The company has about 60 employees.

"We have seen an opening in the market for decorative LED wall or ceiling sconces, and not just in our core (hospitality) business, but others like multi-family (housing) or medical. We think this is a perfect niche for that. It enhances our existing market and gives us new ones."

He said residential and business customers are looking for "energy efficient, no maintenance, excellent light quality" products and moving into the LED market would be good for both consumers and the Van Buren manufacturer, what Null said was "a win all the way around."

Null acknowledged that consumers in the past have complained about newer types of bulbs having a blue-ish tint or not becoming bright quickly enough, "but LED doesn't have that problem," with Vice President Greg Null discussing the benefits of LED.

"These highly efficient fixtures consume about 80% less energy than their incandescent equivalents and about 40% less than fluorescent fixtures. Plus they last many multiple times longer so that owners don't have to spend maintenance time and effort on replacing burned out bulbs."

As for whether the company was changing directions with the introduction of the new product line and the name change, Null said the company is just taking opportunities that present themselves.

"It's not that we're changing directions, we're trying to expand the opportunity. These (fixtures) are fully usable in a hospitality setting and we expect to sell a lot of them, but it's good (to have a product available) for other segments we've not been in before. So we hope to broaden our market."

The new product line was launched at the HD Expo in Las Vegas May 14, with another showing at the LightFair on June 3 and since that time, Null said the company had sold "several thousand" fixtures to companies in the multi-family residential industry though he declined to provide specific sales figures.

He said many locals will not see a huge difference with regard to the launch of the new product line other than the change in name and logo for the time being, but that could change as the LED fixtures become a larger and larger part of Arkansas Lighting's core business.

"If that continues, we'll add permanent people to the (LED fixture assembly) line. Right now, we can handle it with the people we've got."

But even a small bump in sales could push the company to expand either its assembly line or warehouse space or possibly both in addition to the company's already announced expansion earlier this year.

"We think all of those things will happen. We've done some limited expansion of one of our assembly lines. We're still at the scaling point to operate more or less like we've always done. But it won't take much more growth before we start looking at more assembly lines or more warehouse space, but we're not there yet."

Northwest Arkansas is known for calling those hogs, but at Mason Creek Farm near Fayetteville, it’s not about sports, it’s a way of life. Rose Konold, owner of Mason Creek Farm, has developed a new hog breed known as Boston Mountain Hogs.

She said the breed is a sturdy lean and long hog suited for pasture raising, which she does year round, selling winglets for finishing to other smaller local farms and finishing some herself which are marketed to local restaurants and area farmer’s markets.

Realizing that there are strength in numbers, Konold recently organized a local breeder’s association for the Boston Mountain Hog. The group of about 30 met in Fayetteville Wednesday, (June 18) to select their board of directors. The group also has a trademark pending for the recognized breed.

Members in the local breeders group came from as far away as Edmond, Okla., to hear more about marketing opportunities with new brand trademark, which is also U.S. Department of Agriculture, and Animal Welfare approved.

Konold recently met with Whole Foods, who toured her Fayetteville farm looking for potential pork suppliers this region, which will include the new store coming to Fayetteville, in Little Rock and soon-to-be two in Tulsa.

“By pooling our resources the farmers in this association will be able to supply enough meat all bearing the same quality label for larger retailers like Whole Foods,” Konold said.

The group is also eager to work with B&R Meat Processing, new meat processor which recently opened in Winslow. B&R also is USDA and Animal Welfare certified, key for the Boston Mountain Hog trademark.

“I think the timing is ripe for our breeder’s association to take off. We continue to get requests we can’t meet for winglets to raise. We have about two dozen members in our group with breed sows at this time. We expect the trademark approval by early 2015,” Konold said.

BREED SELECTION
The Boston Mountain Hog breed was bred for more bacon and longer loin meats, Konold said.

“Everybody wants the bacon, but’s there’s only so much bacon on the Berkshire and Tamworth breeds we were raising. So through gene selection we bred for a longer hog, with large litters. Because it’s pasture raised and not confined, it needs big eyes and ears and hair to better weather the elements,” she said. “The breed also gives a consistent chop with just enough marbling to be forgiving to the general public who tends to overcook their pork.”

Because the breed is pasture-raised they are leaner than commercially produced hogs, but Konold said she also uses some grains to help finish the hogs at Mason Creek.

“Hogs are what they eat. They graze and eat roots for six months and they get finished with grain, at Mason Creek,” she said.

Al Tynon runs a large hog farm in Northeast Oklahoma raising Tamworth, Berkshire and soon, Boston Mountain Hogs. His farm is located near the Lo Ma organic dairy and he feeds whey from that dairy to his hogs which are raised on pasture.

“Our hogs are leaner and known for their sweet flavor,” Tynon said.

He markets his hogs online and is eager to see what co-oping as a breeder group will do for overall sales.

RETAIL OUTLETS CHANGE PORK HABITS
The group said they were surprised to see the markup at retail when selling directly to grocers like Whole Foods, Ozark Natural Foods and Allens.

“Whole Foods gets 50% to 60% mark up. It’s half that Ozark Natural Foods and less at Allens, when I worked them,” Konold told the group.

She said Ozark Natural Foods sells out of the pork when they have it because people who try it can taste the difference.

As more consumers want to know where their food comes from and who it’s sourced, retailers are taking note. Springdale-based Harps Foods announced a new partnership with Seaboard Foods to supply 100% natural pork, minimally processed with no solution or other additives to the regional grocer.

“The new pork program will improve our customers experience and will allow us to provide a more consistent quality pork product at the same great price points,” said Carey Otwell, Harps director of meat and seafood. “Sometimes it pays to not be the biggest guy on the block because being a smaller company, we have the ability to partner with single source suppliers, which means one pork processor can supply all of our pork needs and we can control quality at a whole new level this way.”

The new Harps branded pork program will roll out to the public this fall in which Harps will begin branding their pork under the “Harps” name. All of Harps meat is cut in-store by meat cutters.

Harps said Seaboard Foods raises its pigs on farms located throughout the Plains, including neighboring Oklahoma and Kansas, and is a 100% USA owned and operated company, with headquarters in the Kansas City metro. Seaboard Foods controls every step along the way in its integrated pork production system.

ANIMAL WELFARE
SeaBoard is a commercial pork processor that still uses a controversial practice known as gestational crating. Many food retailers and restaurants have joined the movement to abandon pork sourcing from companies that use the gestation crates. 

Cargill, announced June 8 it will end the use of gestation crates on its company-owned pig facilities by 2015 and its contractors’ facilities by 2017.  

“Cargill’s decision brings us closer to the day when gestation crates will be relics of the past in the pork industry. Americans simply don’t support locking animals in cages barely larger than their bodies, and Cargill is right to be leading its industry away from the practice,” said animal rights activist Paul Shaprio, vice president for the U.S. Humane Society.

Cargill’s announcement follows similar announcements from more than 60 of the country’s largest food retailers— including McDonald’s and Costco—declaring plans to eliminate the confinement cages from their supply chains.

Additionally, Smithfield Foods announced plans to move away from gestation crates, and meat giant Tyson Foods said “future sow housing” should allow animals to turn around.

For Konold and her fellow breeders who adhere to the Animal Welfare Approved criteria,  pasture raising is the only method that will do.

The days of once a week shopping trips for the family groceries have morphed into something more complex according to analysts with Willard Bishop, a marketing and research firm for retailers and suppliers.

The theme for grocers today is “ready, set, change,” as the Millennial generation, armed with smartphones and limited budgets continue to disrupt the status quo in traditional grocery that has served the past two generations.

Willard Bishop reports that the overall traditional grocery segment raked in $522.8 billion in sales last year, an increase of about 1% in total revenue with a slight dip in market share to 46%.

Traditional supermarkets like Kroger and Publix saw their sales slide 0.4% in 2013, with a cumulative revenue of $444.2 billion and a 39.1% market share. This format experienced the largest dip in market share as more consumers – 39% of the food spending market – spread their spending among Dollar Stores, supercenters and e-commerce, according to the study. Convenience stores and other quick stop stores accounted for 15% of food spending in 2013, unchanged from 2009 and down from 16% in 2006.

A bright spot in the grocery segment are the fresh formats which as a group saw a 10.4% growth in sales to $14 billion last year. The study notes that this format added 1,000 new stores last year with Sprouts, Whole Foods, The Fresh Market each posting double-digit sales growth from the prior year.

Limited assortment stores such as Aldi continued to grow at a steady pace of 4.1% last year with sales of $31.1 billion. Willard Bishop said Aldi is the leader in this category, with plans to add 650 new stores in the U.S. over the next five years.

Supercenter sales grew at 4% last year to reach $200.3 billion, and the store count rose 3.2% to more than 3,800 stores. Willard Bishop notes that Wal-Mart, Target and Kmart all had declining same store sales in 2013.

Craig Rosenblum, partner at Willard Bishop, said Wal-Mart’s move to expand its smaller formats will continue to put pressure on traditional supermarkets. He said food is everywhere today, with even Ace Hardware is selling drinks and snacks.

DIGITAL IS HERE
The traditional shopping experience is evolving partly because four out of five consumers are carrying a smartphone. Jim Hertel, managing partner with Willard Bishop, said e-commerce is not optional for grocery retailers, it’s now essential.

“It will have to become part of all grocers’ strategy going forward,” he said. “As store format change is daunting, it’s essential for retailers to connect with Millennials for future growth opportunities.”

Hertel said mobile is the Millennial’s best friend, and retailers that can figure out home delivery and integrate it into their strategy will be the biggest winners.

Capturing the attention of world “gone mobile” is no easy task. Hertel said 70% of all mobile searches result in action in less than an hour. He said the average person responds to email in 90 minutes, but it takes them just 90 seconds to answer a text. This “want-it-now” society is forcing commerce to at warp speed, he added.

HUGE POTENTIAL
Hertel said e-commerce now accounts for one nickel out of every $1 spent, which demonstrates a huge potential going forward.

Willard Bishop reports the race for the subscription dollar is on among retailers such as Amazon with Prime Pantry, and Sam’s Club’s with My Subscription. Target and Wal-Mart also are testing subscription ideas.

Rosenblum said site-to-store programs which allow shoppers to order groceries online and retrieve the picked order curbside or at a depot are also gaining momentum. But he adds that the consumer has yet to cast a vote on these services because they are not mainstream. 

He suggests that retailers with underperforming stores take a look at possibly turning them into fulfillment centers for online orders, especially if they are open 24 hours a day and already staffed and stocked.

PRICE TRANSPARENCY
Hertel said price is critically important for everyone whether they are the high-end shopper at Whole Foods or the budget conscious Aldi, Wal-Mart and Dollar Store consumer. He predicts that those two diverse ends will perhaps intersect with Wal-Mart’s new Wild Oats Organic line that is bringing premium prices downward.

“Price comparisons are easier than ever and research indicates 59% of shoppers use their phones to check prices when they are in the store. Some 38% have stopped an in-store purchase because they found it cheaper via price checking with their mobile phone,” Hertel said.

Willard Bishop reports that Kroger abandoned its double coupons in an effort to lower prices across the store and better compete with Wal-Mart and other low cost retailers.

Hertel said Wal-Mart’s new Savings Catcher will bring even more transparency in pricing among local competitors. He said it’s important for grocers to win consumer trust with consistent pricing, because they will know when prices are too high and will likely be offended.

ArcBest's announcement of a new corporate headquarters at Chaffee Crossing, bringing with it nearly 1,000 jobs to Fort Smith, is just the latest big news to come out of what was once an aging U.S. Army Base.

Since the Fort Chaffee Redevelopment Authority was formed in 1997 to redevelop 7,000 acres of land returned to local governments by the military, the area has transformed from thousands of acres of empty fields, forests and unoccupied buildings into an economic bright spot in an otherwise rocky local economy.

Following the ArcBest announcement, FCRA Executive Director Ivy Owen said the authority was down to about 3,000 acres left for development, "just less than half."

Of that, he said about 25% of the undeveloped land, located in Barling and Fort Smith, was intended for residential development, while roughly 40% to 50% was targeted for commercial and retail development. The remaining land, he said, was intended for industrial development.

Just in the last year, Chaffee has seen a mix of all of those developments, with the announcement of a new 70 store shopping center along Arkansas Highways 22 and 59, the creation of the Arkansas College of Osteopathic Medicine and the construction of several large housing developments. An expansion of Umarex was also completed within the last year.

The area is also home to modern manufacturing facilities operated by Graphic Packaging and Mars Petcare. Unfortunately, Chaffee Crossing is also home to a modern manufacturing and assembly building owned by Mitsubishi that was never utilized for its purpose of wind turbine production. The more than 400 jobs planned with the Mitsubishi plant faded when economics changed within the wind energy industry.

DIFFERENT DEVELOPMENT PHASE
Owen said FCRA is now transitioning into a different phase of development.

"I think there's going to be smaller scale developments just because, and particularly here at Chaffee Crossing, because of the configuration of our property now. We've sold a lot of large tracts and because of that, we now have a lot of smaller, specialized pieces of property."

He said the land available is suited for more high-end retail and specialized industrial sites like research and development labs or small-scale assembly plants "that didn't have to accommodate 1,000 employees."

As more land is sold and development continues, so does the need for upgraded roads and utilities. Owen said water and other utilities have now been installed for practically the entire 7,000 area and road projects have been following.

One road project underway is the H Street extension in Barling, which will lead to additional residential development by developer Steve Beam. The new shopping center will be south of the H Street extension, though Owen did not say whether any road projects are planned around the development.

Where Zero Street and Wells Lake Road meets near the site of the medical college and a proposed third Fort Smith high school, Owen has said repeatedly that a re-working of the intersection and relocation of Wells Lake Road would need to happen, as well as widening of Frontier Road. The project will take cooperation between the FCRA and the Arkansas Highway and Transportation Department, though it still remains to be seen what will happen until the Fort Smith School Board holds an election in 2015 on whether to approve a millage increase that would fund the new high school.

THE INTERSTATE IMPACT
The completion of McClure Road will no doubt help traffic flow near the ArcBest headquarters and likely spur further development. At the opening of McClure Road in November 2013, Owen said construction of the last mile of McClure to Wells Lake could take place following a large land purchase along the route. So far, no plans have yet been announced for an extension of McClure to Wells Lake Road.

As for other development, Owen said the public should see a mix of commercial properties the Chaffee Crossing area now lacks, including pharmacies, dry cleaners and convenience stores. He said the opening in October of a 6-mile stretch of what will eventually be part of Interstate 49 will have a positive impact on development.

"We've sold property in the last year and a half for (those types of businesses) and I think once that interstate opens and these two things break ground, as you say (the medical college and ArcBest), then those things will start popping out of the ground."

But bringing infrastructure like I-49 or McClure Road into the area to spur development does not come cheap. To complete the small section of McClure that opened last year, the city and FCRA split the $1 million cost. The I-49 stretch's final cost is expected to ring in at more than $95 million.

DEVELOPMENT DEBATE
It is something often mentioned by advocates of downtown Fort Smith, who have made allegations that development at Chaffee is hurting the urban core of the city and any chance at development in the more than 100-year-old section of town.

As late as Tuesday (June 17), Central Business Improvement District Chairman Richard Griffin — himself the owner and developer of several downtown projects — during a meeting about the closure of A Street and the city's concerns about access to the river, commented that the city makes deals with developers and businesses looking to go in at Chaffee all the time and yet, he contends, no such deals happen for downtown development.

"We've had those cooperative efforts out east of town when things have gone in at Chaffee Crossing. 'We'll do this if the city will do such, Chaffee Crossing trust will do such.' It's not unusual."

Owen said he is a supporter of downtown and asserts that development at Chaffee has not been at the expense of downtown.

"If I were a property owner downtown trying to get my property developed, I would probably feel the same way. Not so much it's a detriment, but maybe Chaffee has an upper hand in attraction of these businesses. I've been trying to neutralize that feeling for a long time now because we're not competing with downtown or the older parts of town. Businesses come here because they want to be here. We have not recruited, as far as I know … to my knowledge, we have not recruited any business away from downtown Fort Smith that would have otherwise located down there."

He said the growth was going to happen somewhere and if the land at Chaffee had not been available for development, businesses would have found someplace else to locate.

Whatever cost there is to bringing businesses to Chaffee, Owen said it is offset by an improved tax base and the creation of jobs.

As for how much longer the public can expect the redevelopment authority to be in existence, Owen said it would likely take another eight to 10 years before enough of the property is marketed, sold and developed for the FCRA to wind down operations.

"We will fade into the sunset. Probably what will happen is that the existing employees by that time, they'll have enough pre-warning that that is going to happen that they can secure other jobs or the businesses out here may be able to hire some of those people. Or the city and the county might be able to hire some of those. But by that time, as we dwindle down in terms of assets, so will our staff. We won't need as much staff at the end of the 12 years as we do now."

How close is too close for Wal-Mart to put a Neighborhood Market to its cash cow supercenters? The retail giant said Thursday (June 19) that one to two miles outside a supercenter is the minimal distance guideline for placing Neighborhood Markets.

Jeff Davis, chief financial officer for Wal-Mart, was asked that question during a global consumer conference held in Nantucket, Mass., and sponsored by Jeffries, a global investment banking firm.

He said Wal-Mart has noticed when it locates a smaller format store in communities where it has strong brand recognition from a supercenter, it is other retailers that lose market share.

“We don’t really see supercenter’s losing share,” Davis said.

Walmart U.S. CEO Bill Simon has said the smaller formats are a way for the retailer to capture sales they are losing to dollar-store formats and other convenience competitors for the fill-in trip — a market valued at $415 billion a year. Wal-Mart said it has just 10% of that fill-in share, but aims to grow the share this year with an accelerated ramp-up of smaller format stores.

Northwest Arkansas is an area where Wal-Mart is building out its store infrastructure with 12 projects announced or in progress in Benton and Washington counties. Centerton, a small bedroom community five miles from Bentonville, recently hosted a grand opening for a Neighborhood Market, and will welcome a supercenter next summer.

Springdale, a town of 70,000, has been comparatively underserved by Walmart with just one supercenter and one Neighborhood Market. But the retailer is about to open a new supercenter this fall. The outlying towns of Farmington and Pea Ridge are each also welcoming a Neighborhood Market in the coming months.

Wal-Mart is also investing in at least two area downtown regions with Neighborhood Markets planned for Rogers and Bentonville next year.

The rural town of Decatur will get a Walmart Express format early next year. The town is  located between Gravette and Gentry, both of which already have these small formats.

Bentonville, Wal-Mart ground zero, is home to five projects announced, completed or with construction in progress.
• Supercenter on the Bella Vista / Bentonville line
• Neighborhood Market in SW Bentonville
• Neighborhood Market downtown Bentonville
• Walmart to Go, convenience store
• Walmart online grocery drive up depot

Simon recently said the 200 new small formats going up this year might not be enough to move the needle for a company with nearly a half trillion dollars in annual revenue. But, he added that 2,000 of these small stores might.

Simon said going forward he expects to see more small stores built than supercenters as the retailer works to fill-in markets where it has already has staked a claim. He said the Neighborhood Market comparable sales are on par with top grocers like Kroger and performing well with little to no realized cannibalization at nearby supercenters. 

“Think of it this way, a Walmart Express with site-to-store, ship-to-store, full grocery, gas and pharmacy can drive the same sales as three to five Dollar Stores. He said the hybrid Neighborhood Market can drive the sales of 10 Dollar Stores, and both models make better use of capital given their reduced building costs," Simon said in October during an investor conference.

Gov. Mike Beebe said Thursday (June 19) he’s not calling a special session on changes to the public school employee insurance program until he sees a roll call from each chamber of the legislature with a big majority in both.

The Governor also said he wants to deal with the prison overcrowding situation in a special session and he’s open to a provision to restrict lottery games, but beyond that he does not anticipate adding to a special session agenda.

In a Talk Business & Politics interview on Thursday morning, Beebe said he still wasn’t sure if he would call a special session on the insurance issue.

“We don’t know yet,” he said. “If the bill we’ve already seen and that theoretically is being circulated among the members of the General Assembly is the bill, then I will support that bill and will call a (special) session if I get a roll call from each house that suggests that there is significantly over the majority needed to be able to pass it.”

Beebe said he has heard from lawmakers who are troubled by the potential solution to the teacher insurance crisis, which includes eliminating part-time employees from the plan as well as spouses who have other insurance options. Also, lawmakers are talking about earmarking a portion of state funding that goes to general education needs specifically to paying for insurance premiums.

“I think feedback that I’ve gotten is there is some disagreement among members of the General Assembly,” Beebe said. “I think there is opposition to taking part-time [employees] off. And I think there is some opposition to re-directing some of that FICA saving money, that’s theoretically going to be generated, away from the public schools generally and into insurance payments.

OTHER ITEMS
Beebe is open to adding other items to his call for a special session, if it materializes.

“If we’re going to have a session then we’re going to have to address the problems our counties are having in county jails and our prison back-up,” he said.

County officials are housing a backlog of state inmates, which is putting a strain on local resources. There is also a funding shortfall that is preventing the state from access some existing prison beds, but Beebe said there is a way to free up $6.3 million to resolve the problem.

“That $6.3 million will get you 600 beds in existing areas,” he said. “It could reduce that backlog.”

Beebe said he is also open to adding the issue of a potential lottery restriction to a special session’s call. State lottery officials have expressed interest in adding monitor games as way to boost sagging lottery revenue; however, some lawmakers are worried it will lead to more addictive gambling behavior and they want to enact legislation to restrict the new game’s introduction.

“I will include the lottery restriction on the call for a special session if the consensus is there in both chambers,” Beebe said.

Beebe said he did not foresee a possible call item to include changing a state law allowing more access to the state’s ARE-ON network, which offers super high-speed bandwidth and is restricted to research universities and medical networks.

State education officials and some members of a task force studying broadband access for K-12 schools have advocated for allowing the schools to tie into the ARE-ON network. Broadband providers have expressed skepticism on the costs and need for the move in certain areas of the state.

Beebe, who supports a law change to allow for more ARE-ON access, said the broadband law needs to be addressed, but he doesn’t think the legislature has had enough discussion on the subject to add it to his special session call.

“That’s not ripe. The legislature is not ready to address that,” he said. “There hasn’t been enough discussion about it. There’s still a lot of stuff that needs to be worked out. They’ll probably have to deal with that later.”

Also of interest, if a special session is called, the Arkansas House of Representatives is undergoing a massive renovation in its main chamber. The House would have to meet in other quarters. Sources say the Big Mac building and the Old State House are two venues being considered.

Fort Smith was home to Arkansas'first compressed natural gas (CNG) fueling station and now Fort Smith is home to one of the few independent CNG conversion businesses in the state. The business, Falcon CNG, handles everything from single vehicle CNG conversions to fleet-wide conversions.

Owner Barry Rowton said the business is more than just conversion, saying he provides "maintenance, service and repair of the same."

Rowton, who spent more than 11 years with Arkansas-Oklahoma Gas (AOG), said with the growth of CNG in the region — including an expected second regional fueling station in Fort Smith operated by AOG — the time was right for him to launch a conversion business.

"With the markets around us and our market picking up, along with the price of natural gas staying low while petroleum is going up, with the interest in western Arkansas going up, the market was a perfect fit."

Rowton said he is the only employee of the business located at 3707 Wheeler Ave., in Fort Smith, but he does have two technicians he can call in for assistance as needed.

While not providing revenue figures, Rowton did say that in the month he has been open, he has already had more than 20 people "either call or show up wanting conversions or service and we have a couple of fleets wanting conversion."

He said conversion costs have fallen in recent years, making it more affordable for more everyday drivers and fleet managers to justify the cost. The cost for a half-ton pickup truck, Rowton said, would be about $6,500 for a 13.5 gallon CNG tank installation.

What could help businesses invest in conversions is the possibility of a new program from the state that could rebate up to $4,500 or 50% of the conversion cost for fleets of three or more vehicles, Rowton said.

"The Arkansas rebate is supposed to be released in July," he said. "The details are only verbal from the Arkansas Department of Energy."

It would not be the first time the state has provided CNG-based incentives. In 2011, the Arkansas Energy Office made available $470,000 in grant money to build at least two CNG fueling stations in the state.

Arkansas is not the only market Rowton is eyeing for business. He hopes his proximity to Oklahoma and the existence of a CNG fueling station at the On Cue Express in Arkoma, Okla., a small town located across the street from Fort Smith, drives business.

While Arkansas could be offering rebates for conversion as soon as July and the rebates will only apply to EPA-certified CNG conversion kits, Oklahoma offers an income tax credit that Rowton said allows all CNG conversions to qualify.

But no matter which of the two states a customer may call home, Rowton is ready to make the conversions a reality. And for people possibly interested in CNG for cost savings but are worried about using CNG instead of conventional gasoline, Rowton said converted vehicles still has gas tanks that can carry conventional fuel so individuals driving outside of a CNG fueling area are not left in the middle of nowhere with no way to refuel.

"A lot of people don't understand that you do not give up the ability to drive on gas," he said. "The vehicle is not modified, you simply add on a fuel storage, management and delivery system. … If you run out of CNG, the computer instantly switches to gas. The car doesn't die."

In all, Rowton said there are about five independent CNG conversion businesses in Arkansas, including his own. He said several other places offer CNG conversion, including car dealerships (Smith Auto Group in Fort Smith being one), but the conversions are typically limited to the dealer's specific brand, meaning a Toyota could not be converted by a GM dealership and vice versa.

"If you have something outside of that (brand), you can't go to that (dealer for a conversion). That's where someone like me would be a better fit."

Arkansas’ jobless rate fell to 6.4% in May, but the state’s labor force continues to decline in size, and the number of employed during May was the lowest level of the year. Overall, the state’s labor force size and number of employed remains below pre-recession levels.

The May rate of 6.4% was below the April rate of 6.6% and below the May 2013 rate of 7.5%, according to the report issued Friday (June 20) by the U.S. Bureau of Labor Statistics. The May figures are subject to revision.

Year-over-year, the Education and Health Services sector was up 3,800 jobs, the state’s tourism sector gained an estimated 3,000 jobs, the Trade, Transportation and Utilities sector was up 2,800 jobs, and the construction sector was up 1,500 jobs.

Arkansas’ labor force was an estimated 1.315 million in May, below the 1.322 million in April, and down 0.08% compared to 1.326 million in May 2013. The year-over-year comparison shows an estimated 10,952 fewer Arkansans in the labor force. There are 45,513 fewer Arkansans in the labor force compared to May 2007, a decline of almost 3.34%.

The number of employed in Arkansas during May was 1.231 million, below April employment of 1.235 million, buit up an estimated 4,649 jobs compared to the 1.226 million in May 2013.

The number of unemployed was an estimated 84,124 during May, down from the 86,761 in April, and well below the 99,725 in May 2013.

Arkansas’ annual average jobless rate fell from 7.9% during 2011 to a revised 7.5% during 2012. The initial annual average jobless rate for Arkansas during 2013 is 7.5%.

UPDATED INFO:Greg Kaza, economic researcher and executive director of the Arkansas Policy Foundation, said the 1,800 new Arkansas jobs in May “means the state's labor market has regained nearly 80 percent of payroll employment lost as a result of the Great Recession.” He added that the jobs market in Arkansas “is slowly approaching the peak achieved in the previous cycle, 1,209,800 (February 2008).”

Kaza also noted that BLS figures show that 30 of Arkansas' 75 counties added new jobs from the end of the Great Recession (June 2009) through December. The top five counties for job gains are: Benton (+9,718), Washington (+5,244), Craighead (+4,379), Faulkner (+2,210), and Pulaski (+1,686) counties.

ARKANSAS SECTOR NUMBERS
In the Trade, Transportation and Utilities sector — Arkansas’ largest job sector — employment during May was an estimated 243,500, down from 243,600 in April and ahead of the 240,700 during May 2013. Employment in the sector hit a high of 251,800 in March 2007.

Manufacturing jobs in Arkansas during May totaled 153,700, down compared to 154,600 in April and above the 152,200 in May 2013. Employment in the manufacturing sector fell in 2013 to levels not seen since early 1968. Peak employment in the sector was 247,300 in February 1995.

Government job employment during May was 214,800, down from 215,800 in April and below the 215,200 during May 2013.

The state’s Education and Health Services sector during May had 175,900 jobs, up from the 173,400 during April and up from 172,100 during May 2013. Employment in the sector is up more than 23% compared to May 2004.

Arkansas’ tourism sector (leisure & hospitality) employed 107,800 during May, down from 108,700 during April, and above the 104,800 during May 2013. Employment in this sector reached a high of 109,100 in March.

The construction sector employed an estimated 47,000 in May, down from 47,400 in April and above the 45,500 in May 2013. The sector is off the employment high of 57,600 reached in March 2007.

NATIONAL, REGIONAL DATA

The BLS report also noted that 49 states had unemployment rate decreases from a year earlier, and one state had and increase. Alabama’s jobless rate was 6.8% in May, up from 6.4% in May 2013. The national jobless rate during May was 6.3%, and was down from the 7.5% in May 2013.

Rhode Island had the highest unemployment rate among the states in May at 8.2%. North Dakota again had the lowest jobless rate at 2.6%.

The May jobless rate in Oklahoma was 4.6%, unchanged compared to April and down from 5.4% in May 2013.

Missouri’s jobless rate during May was 6.6%, unchanged compared to April and down from 6.7% in May 2013.

The Arkansas Legislative Council passed on a voice vote an interim resolution by Faulkner County Republican Sen. Jason Rapert that affirms the council's support of Act 83, a constitutional amendment passed by Arkansas voters in 2004 that banned same-sex marriage in the state.

The resolution comes more than a month after Pulaski County Circuit Judge Chris Piazza struck down the ban on same-sex marriage, which temporarily opened the door for same-sex couples to marry in the state before a stay was eventually issued in the case.

The resolution passed Friday (June 20) asked the Arkansas Legislative Council to "explore legislative remedies to prevent the Arkansas Constitution and the will of the people of this state from being negated by judicial activism which violates the separation of powers ensured in our form of government."

So far, it is unknown what that legislation could be, though there has been talk by some in the House of impeaching Piazza.

Sen. Jon Woods, R-Springdale, said he voted in favor of the resolution and said Friday's move by the legislative council — which he described as running the day-to-day of the state between legislative sessions — would not likely result in specific actions against Piazza other than the legislative council's endorsement of Act 83.

"No, I think that's it," he said.

The resolution notes that "marriage between one man and one woman is the building block upon which our society is based," and that the "power to regulate marriage is a power reserved to the people that lies within the domain of state legislatures and not with the courts."

As reported by the Arkansas Times, the resolution easily passed the body, though he said "eight people were on hand to object to the resolution, including a Little Rock teacher who lost her job at Mount St. Mary Academy after marrying her partner. Rep. John Walker, a giant in the civil rights struggle for African-Americans, rose in opposition to Rapert's resolution."

Another to rise in opposition of the resolution was Democratic Sen. David Johnson of Little Rock, according to the Arkansas Times report.

"Johnson noted that Judge Chris Piazza, blistered in the Rapert opinion, had issued a decision in keeping with that by numbers of judges across the country. All have found equal protection and due process violations in state discrimination against gay couples."

Former Arkansas House Minority Leader Greg Leding, D-Fayetteville, made his feelings on the vote clear in a post to his Twitter account.

"That Legislative Council must waste breath on an embarrassing (if legally impotent) resolution this morning is a shame," he wrote.

Sen. Uvalde Lindsey, also a Fayetteville Democrat, attended the Council meeting but missed the vote. However, he was one of eight on the council to vote no on a suspension of the rules that allowed Rapert’s resolution to be heard. Lindsey told The City Wire he believes people seeking same-sex marriage are protected by the U.S. Constitution.

“I may not agree with all the gay marriage stuff, but that doesn’t matter when it comes to the Constitution,” Lindsey said. “People have a right to do certain things under the Constitution, and that’s what Judge Piazza was saying (in his ruling).”

Lindsey also said he does not believe it is a proper role of the Arkansas Legislature to “castigate the judicial branch.”

Rep. Terry Rice, R-Waldron, told The City Wire that he spoke in favor of Rapert’s resolution because he believes in “traditional marriage and that marriage is between one man and one woman.”

Rice, who recently defeated Sen. Bruce Holland, R-Greenwood, in the Senate District 9 GOP primary and does not have a November opponent in that race, also said Judge Piazza “created a crisis that wasn’t necessary, when he didn’t rule completely.” 

“I just felt like he was irresponsible the way he did that. ... He did it on a Friday evening as an activist judge,” Rice said, adding, “I try to be respectful of everyone’s rights and view points,” but believes the Legislature has the right to question the actions of the judicial branch.

As to if the issue of same-sex marriage will eventually be settled by the U.S. Supreme Court, Rice said he isn’t sure of the outcome, but hopes “traditional marriages” are upheld.

"We’ve got a divided nation, and I think that one fundamental thing we have, and the stability we have, is the family and that’s one man and one woman. ... And when that goes it opens us up to things that I don’t think we’ve thought about,” Rice said.

For his part, Woods said he supported the resolution because he was standing up for the rights of his constituents, who he said voted overwhelmingly for the gay marriage ban back in 2004.

"It stirred up emotions and I got a lot of phone calls over the weekend (of the ruling) and into the following week (asking), 'What are you going to do about it?' A lot of people were upset and a lot of people who voted for the amendment in '04 felt disenfranchised.”

Woods also voiced sentiments similar to Rice, saying that the timing of Piazza's ruling was nothing more than political games, especially by issuing the ruling near the close of business on a Friday afternoon, and this Friday's vote by the legislative council was just a way to show Piazza that it can go both ways.

"The reason I would say I supported Jason Rapert's resolution is because if the judge wants to play games at the last minute going into the weekend, then I hope he enjoys the resolution we just passed," Woods said. "If he wants to play games at the last minute going into the weekend, then Jason (Rapert) wants to have his resolution and be heard and people in my district want to be heard. So OK, then. That's why I supported the resolution."

The Human Rights Campaign, which has lobbied to overturn Amendment 83, also noted the “gamesmanship” in the timing of the resolution passed by the Council.

"The Arkansas Legislative Council can't intimidate the judiciary into ignoring the fact  that gay and lesbian couples have a constitutional right to marry,” Human Rights Campaign President and Arkansas native Chad Griffin said in a statement. “This is a matter of basic fairness and shouldn't be subject to political gamesmanship.”

Gov. Mike Beebe is heading overseas for his third European trade mission in five years. In a recent Talk Business & Politics interview, Beebe said he will travel to London, Paris and the Czech Republic beginning July 12.

“Hopefully, they won’t kill me like they did in the China trip a couple of years ago. We were 11 days in China, 13 days counting the travel times. We were in eight different hotels in eight different cities and provinces,” Beebe said.

Beebe traveled to London, Paris and Hamburg in 2009 for a series of high-level meetings with existing companies doing business in Arkansas and new ones he hoped to land. The governor also visited France in 2012 for an agricultural related economic trip to meet with French government officials interested in promoting food exports and research between the two entities. That trip also included visits with Dassault Falcon Jet, which announced a $60 million expansion of its jet completion campus in Little Rock several months later.

Also in 2012, Beebe made his earlier referenced extensive economic development tour of China in an effort to open up talks for more business exchange.

The upcoming European trade trip will last nine days from July 12-21.

Beebe plans to attend the London Farnborough International Air Show — one of the world’s largest aerospace and aviation manufacturing trade shows in the world. Representatives from several Arkansas companies will also attend, and Beebe plans to travel to France to meet again with Dassault Falcon Jet, the Paris-based high-end aircraft builder that has one of the largest international footprints in Arkansas.

“We have expanded that [Dassault] with the potential for even further expansion and maybe even a supplier there too,” Beebe said.

The Czech Republic is new territory for Arkansas economic development officials, but the former eastern bloc country sports growing manufacturers, including gun-related and automobile-related companies.

“They’ve had very little, if any, state gubernatorial contact in the Czech Republic and there are a number of businesses that are looking at a North American presence,” Beebe said. “It’s a fertile field because everyone is going to China and Taiwan and Paris and London and all those other places. We’d like to get in on the ground floor of what the Czech Republic companies might be interested in.”

A failed May 1 vote on whether to unionize workers at an OK Foods facility in Heavener, Okla., could be dismissed by the National Labor Relations Board after it claimed the company interfered with the vote.

In a letter written by NLRB Field Examiner Amy Novara, she details a long list of allegations against the company related to the May 1 vote, including financial incentives to ensure the unionization vote failed.

"During the past six months, the Employer granted wage increases and retroactive pay to employees, including prior to the filing of the petition on March 20, 2014, and during the critical period after the filing of the petition, in order to discourage union activities and support of the union in violation of Section 8(a)(3) of the Act," she wrote.

She also said after March 20, OK Foods denied wage increases and retroactive pay to employees that had engaged in union activities.

Novara's letter continued, alleging the company threatened employees if they voted in favor of unionizing with the United Food and Commercial Workers Union Local 1000 during the May 1 vote.

"In or about February 2014, the Employer, but Supervisor Sparks, informed employees that they could not address wage increases and retroactive pay because of the Union and threatened employees with loss of wages if employees selected the union as their collective bargaining representative, in violation of Section 8(a)(1) of the Act," she wrote.

Other similar allegations were made in her letter against OK Foods CEO Trent Goins, who she said "informed employees that wage increases and retroactive pay were being withheld because of union activity in violation of Section 8(a)(1) of the Act."

An attempt to contact Goins for this story was unsuccessful.

Novara stated in her letter that a settlement agreement attached to her letter "notifies employees or members that the Charged Party (OK Foods) will cease and desist from engaging in conduct proscribed by the Act," adding that the May 1 election would be thrown out and another election on unionization would be held.

Even though the NLRB's field examiner has laid out her case, with 18 different alleged violations of the law, OK Foods has not acknowledged that it has agreed to the settlement by the deadline date of Thursday, June 26. Novara stated that if the company did not accept the settlement, a formal complaint could be filed against OK Foods.

The UFCW said after the failed vote that it would file and objection, with UFCW's Anthony Elmo saying the company "subverted the vote as much as possible."

In a statement Monday, UFCW Local 1000 President Ricky Burris said forming a union would protect workers from the types of actions alleged in the NLRB letter.

“We want these workers to get a fair chance to have their voices heard. OK Foods has to rely on lies, threats, and coercion to scare these workers away from forming a union. In reality, forming a union will help protect them from a company that obviously has no respect for them whatsoever. I’m excited that these workers are being given a chance to vote again," he said.

The union said workers have complained to the UFCW about "low wages, expensive healthcare benefits, and unfair and unequal treatment at (the) OK Foods chicken processing plant in Heavener."

It is unclear when a new election could be held.

Efforts have also been made to unionize Fort Smith and Muldrow, Okla., OK Foods facilities, though no formal votes or actions have taken place like the May 1 vote in Heavener.

OK Foods is a subsidiary of Industrias Bachoco (IBA), a company which boasts several unionized facilities in its native Mexico. Shares of Industrias Bachoco were trading at $52.67 during mid-day trading, up nearly a tenth of a point.

Gov. Mike Beebe says math, not health, may eventually determine the fate of the Private Option.

During an interview with Talk Business & Politics, Beebe said it would be difficult to throw 180,000 people off health care, but he said percentages and dollar figures are likely to influence votes to see if the Medicaid expansion-funded health care program survives.

“We are going to be paying for this whether we take the federal money or not,” Beebe said, repeating an argument he made when the program was first funded.

The Private Option takes federal tax dollars to be used for expanding Medicaid under the Affordable Care Act and uses that money to subsidize insurance plans for working Arkansans. With the loss of two key Senate votes in recent elections, funding for the Private Option appears in jeopardy.

“Here is another reason for my optimism,” Beebe said. “If you’ve got 74% of the legislature that is for this and 26% that is against, do you think that 74% is going to let the 26% get away with that? I suspect there will be as much, because it takes a three-fourths vote. I expect there will be as much of that 74% as is possible to force somebody’s hand.”

Beebe is term-limited and will not be Governor in 2015 when the Private Option is debated again. Lawmakers must approve funding for the program, which will require a three-fourths vote of both chambers of the General Assembly.

Last week, lawmakers also rolled out several new phases of the Private Option that will begin implementation in the next year. Dubbed the Private Option 2.0, those new elements include independent savings accounts, cost-sharing, and changes to transportation payments.

Beebe contends that because of political rhetoric boxing some legislators into positions from which it will be hard to pivot, additional changes may be made to the Private Option in next year’s legislative session.

“That’s why you may see some tweaking to the point that it allows some cover for those folks that once they look at the whole world and see the whole picture, they back off the rhetoric,” he said. “When they were running and didn’t know any better and when they look at the realities, there’s a $100 million hole in the budget if they do away with it. You’re not going to take it away from education, the Supreme Court won’t let you. Prisons are already in trouble. Where are you going to get the money?”

Beebe also discussed positive results from the state’s Payment Reform Initiative, a cost-containment effort he started two years ago. The effort moves Medicaid reimbursement away from a “fee-for-service” model to a “bundled services” model.

Hospital executives say it is bending the cost curve, while improving health care.

“America has to do this and I think the other 49 states are going to follow Arkansas,” Beebe said. “I think the federal government is going to follow Arkansas. The old ‘fee-for-service’ model is unsustainable. It’s never going to continue to be able to work. This is the way the country has to go and Arkansas is leading the way.”

A WORKFORCE CZAR
As changes are being made to overhaul the state’s approach to workforce education, Beebe is not closed to the idea of creating a workforce czar to push for faster reforms.

“[T]here is a good point to be made that a good governor has so many plates that he has to balance from education to prisons to health care to all sorts of things that sometimes it’s hard to devote as much time to that one topic,” Beebe said. “So if a governor is not going to do it, a czar certainly could. But you could also have an agency that with a cabinet head that you designate as a lead to go get it done. Right now, the Legislature is doing a good job of being a czar on this expanded and collaborative effort. So I expect you’ll see, you may end up with, a bunch of czars which may be as problematic as not having one at all.”

Beebe was complimentary of efforts by Sen. Jane English, R-North Little Rock, who begins this week a series of meetings focused on reviewing workforce training and education programs.

English says the series of meetings over the next several weeks and months are aimed at educating lawmakers on the resources that exist and the possibilities for better coordination among programs.

Beebe says it is imperative to streamline the moving parts of workforce training in order to continue successful economic development.

“What we don’t have is the kind of coordinated, across-the-board, everywhere success stories that you would like to have, and workforce development may be the number one key to economic recruitment, retention, expansion,” he said. “We hear stories that a lot of people are unemployed and we’ve got a lot of jobs open and waiting. But the skill levels of the people unemployed don’t match the needs of business and industry so it’s part of the state’s responsibility.”

Beebe added, “What’s going on now — and Senator Jane English deserves a lot of credit, but so does my workforce cabinet — pooling the resources from all of those different resources that currently exist and trying to do it a comprehensive and cohesive way gets the best bang for the taxpayer’s buck.”

Keeping shelves better stocked to boost sales and top line revenue is a priority among Wal-Mart executives working to break the cycle of negative to flat comparable store sales that have dogged the retailer for the past year.

Jeff Davis, chief financial officer for Walmart U.S., recently outlined the retailer’s strategy to drive sustainable sales growth by leveraging what they believe are strong Wal-Mart fundamentals. Davis spoke at the Jeffries Global Consumer Conference in Nantuckett, Mass., on June 19. He said the retailer desires to drive sales in physical stores but also across their digital platform and that effort starts with ensuring the shelves in all stores are well stocked.

Davis and Bill Simon, CEO of Walmart U.S., have each said the retailer recently revamped the way the product gets to the shelf and is reordered.

“What we've done this past year is we really try to demystify what we were doing. Previously we had a number of algorithmic exercises we were asking our associates to go through in order to make sure we had the right product in the right place. But we just quite honestly we got down to the basics and went back to simplifying the process,” Davis said. “It is about receiving inventory in the evenings and getting it on the shelf. It's about making sure that if it is not on the shelf that it is appropriately put into a bin in the back.”

He said when the items are sold, Wal-Mart’s point of sales data system lets them know to go pick it and get it back on the shelf.

“It is that simple,” Davis said. “And what is amazing about this is we actually have seen a significant improvement not only in our associate satisfaction, our productivity, the customers are also responding and we are actually seeing a lift in our comps in those stores that are actually executing the best on this what we call OSA First.”

ROOM TO GROW
Simon also said the in-stock percentages are higher after the retailer moved to the less cumbersome method of tracking inventory in the store. During the recent shareholder media day (June 5) he said simplifying the process “eliminating the algorithmic gymnastics in the former system” has made a difference in execution and the result has been improved in-stocks for the retailer, better than historical levels.

Davis said the in-stock goals of 95% have been increased as high as 97%. With nearly $280 billion in U.S. sales last year, just one percentage point improvement holds potential for sales to grow.

“We're really pleased by what is happening there and it is helping us drive our comps in certain key categories,” Davis added.

With reduced store labor and thousands of new products added to the average supercenter, on-shelf availability has been at the forefront of Wal-Mart and its suppliers’ minds for sometime.

SPARC 2.0
Duncan Mac Naughton, chief merchandising officer for Walmart U.S., has said the out-of-stock issue is a multibillion dollar opportunity for the retailer and its supplier base. Last summer, these phantom sales prompted Wal-Mart to announce the testing a program called SPARC 2.0 to help give suppliers more visibility into their inventory sitting in stores.

In theory, SPARC 2.0 allows suppliers and third party merchandisers to access inventory data with their smart phones instead of having to wave down a Walmart worker and use a “telzon” device to see their in-store inventory. It also gives the supplier using the application the ability to print labels for missing products and “pick lists” to get the shelves restocked as soon as possible.

SPARC 2.0, dubbed the the Supplier Portal Allowing Retail Coverage initiative, was put to use in about 150 stores last fall in hopes of raising on-shelf-availability of product sold by the retailer. Wal-Mart admitted that out-of-stocks were problematic in some stores and expected SPARC 2.0 to make a difference.

The retailer did not provide an update on the SPARC 2.0 program despite two requests, but one of the early adopters — Crossmark — gives the program high marks. As a third party merchandiser, Crossmark works inside Wal-Mart’s stores on behalf of the retailer as well as supplier customers.

“I think SPARC 2.0 has been a great success. The ability to get the important OSA-related work done in-store without asking for the help of a Walmart Store associate is very important to our productivity and the return on our client’s investment,” said John Owen, executive vice president for Walmart and Sam’s Club Team at Crossmark.

Owen said the industry strives for 99% in-stock percentage.

“I applaud Walmart for being forward thinking on this. When on shelf availability improves we all win, and most importantly we do a better job of serving our Walmart customer,” he said.