As the argument over whether the city or Fort Smith should hire an outside auditor to review legal billings following claims of invoices submitted for work never completed continues, the city of Fort Smith has confirmed the city's own internal auditor left the position effective May 16.

According to City of Fort Smith Human Resources Director Richard Jones, Mitzi Kimbrough's last "official day" of employment was May 16, though he said she had been on medical leave since January before ultimately deciding to leave her employment with the city.

But even with the position having been empty since January and knowing that Kimbrough's return was not certain, the city did not prepare for any sort of transition, Jones said.

"We were just trying to organize," he said. "We didn't want to put the horse before the carriage just in case at the last minute she was able to return."

It took more than a month before the position was officially advertised as open on June 22, with Jones saying the job description has been slightly revised, though he could not say what aspects of the position have changed when asked for specifics.

"We actually knew she was leaving, but prior to her leaving, we solicited input from the city's audit committee, revised the position description and we actually just advertised for that position starting on June 22. … In all honesty, (I'm) not really (sure what the changes were). I have a copy of the position description that we used to create the position posting. So I have the current posting, but to go back and compare it from the time we filled it with Mitzi, I'm going to have to go back and (see) if that document even exists."

Jones did provide a draft and a final version of the job posting that went live on June 22.

Selected responsibilities for the position include the following:
• Assist as appropriate in the investigation of suspected fraudulent activities within the organization and notify management and the audit committee of the results;
• Consider the scope of work of the external auditors and regulators, as appropriate, for the purpose of providing optimal audit coverage to the organization at a reasonable overall cost; and
• As appropriate, provide consulting and advisory services to management that add value and improve an organization's governance, risk management, and control processes without the internal auditor assuming management responsibility.

As for what the city has done in the nearly seven months the position has not had a staffer in place on a regular basis, Jones said initially that he did not believe anyone was doing the work assigned to the internal auditor.

In a followup email, he explained that an outside company has assisted the finance department during the absence created this year.

"It is my understanding from talking with our finance department today that Gradient Solutions Corporation has been assisting the City with the internal audit function in the absence of an Internal Auditor. Christy (Deuster) from finance sent this, 'Here is what we paid Gradient for 2013 and to date 2014. To the best of my knowledge, we have not been charged any additional fees in conjunction with the Internal Audit position'."

According to billings provided by the city, the company billed the city of Fort Smith $89,640 in 2013 and so far this year has billed the city $57,563.

As for how long it will be until the city has an internal auditor on staff again, another document provided by Jones said applications would be screened beginning July 7, with semi-finalists set to be interviewed "if necessary" between July 18 and 31. Finalists for the position will be selected by Aug. 8 with interviews scheduled to take place between Aug. 18 and Aug. 29. The top applicant will be selected Aug. 29 with an offer for employment made Sept. 12. The tentative schedule provided to The City Wire states that the new internal auditor will begin his or her duties Oct. 6.

As for how much the city will pay annually for the position, Jones said it would be in the range of $54,787 to $70,470. He confirmed that Kimbrough's final annual salary was $75,729.

All of the information released about the internal auditor position comes on the same day that City Administrator Ray Gosack notified the Board of Directors that a question has been raised as to how many times a director can place an item on the agenda after having it removed, as has now happened to City Director Philip Merry twice since he has attempted to get an outside audit of legal billings from the Daily and Woods Law Firm and establish a committee to review whether the city should continue contracting with an outside firm or hire a staff attorney to serve as in house counsel for the city.

Merry made the request after attorney Matt Campbell made allegations against Daily and Woods of billing the city for calls that never occurred and over-billing for other work completed as part of a lawsuit Campbell had filed against the city. Campbell represents a group in litigation against the city as part of a whistleblower lawsuit.

Merry's most recent attempt to have the item receive an up or down vote at Tuesday's (July 1) Board meeting was struck down Thursday (June 26) after City Directors George Catsavis, Keith Lau, Mike Lorenz and Vice Mayor Kevin Settle requested the item be removed from the agenda.

Gosack said he did not know how many times the item could be removed from an agenda, "but thought that Robert’s Rules of Order might address this topic. Attached is a letter from the city attorney which identifies provisions in Robert’s Rules of Order which may be applicable. However, the city attorney didn’t provide an opinion on the current situation since the subject matter involves his law firm.
 
"If the board would like an opinion on this topic of re-introducing items previously removed from an agenda, we will need to seek the services of another attorney to provide the opinion."

In his letter, City Attorney Jerry Canfield said the 10th Edition of "Robert's Rules of Order" states that an item can be renewed, though there is an exception to the rule.

"At Page 329, § 38, of that edition, it states that 'a main motion that was introduced but not adopted during one session can…be renewed at any later session unless it has become absurd.'"

The letter from Canfield also quotes from the parliamentary book, which states that a "motion is dilatory if it seeks to obstruct or thwart the will of the assembly as clearly indicated by the existing parliamentary situation.

"… Any main or other motion that is absurd in substance is dilatory and cannot be introduced. It would also be ridiculous if a minority or two or three members could constantly raise points of order and appeal from the chair's decisions on them, or repeatedly move to lay motions on the table, or offer frivolous amendments. If a member could demand a division on every vote even when the result was clear, or move to adjourn again and again when nothing had happened to justify renewal of such a motion, business could be brought to a standstill."

Merry's resolutions seeking an independent audit and establishment of the committee have never seen a public vote within a meeting and he has not indicated whether he will continue pursuing a vote following his latest defeat.

The next meeting of the Fort Smith Board of Directors is Tuesday, July 1, at 6 p.m. at the Fort Smith School Services Center, 3205 Jenny Lind Road.

Dan McKay, who has worked for five years as the CEO of Northwest Health System, has been named CEO of Sparks Health System in Fort Smith. McKay is the fourth named CEO of Sparks since January 2013.

McKay will also be responsible for operations at Summit Medical Center in Van Buren.

McKay joined Northwest in 2010 and immediately began work to develop collaborative relationships with physicians on the medical staff, according to a statement from Northwest. Sparks and Northwest are both owned by Franklin, Tenn.-based Community Health Systems.

“It is bittersweet to leave Northwest Health System after how much has been accomplished together with our physicians and employees,” McKay said. “This role has been one of the most rewarding experiences of my career and I am confident that the momentum created over the past five years will continue and even grow.”

He worked to help recruit 100 doctors to the system’s medical staff and oversaw the opening of 20 new clinics. The system also expanded and opened several new services, including a stroke program with University of Arkansas for Medical Sciences, a hospitalist program, telemedicine at Bentonville and Springdale, and a new emergency department in Springdale. Springdale was also the first hospital in Northwest Arkansas to receive chest pain accreditation, which was soon followed by Bentonville.

“Of all the ways Dan made Northwest a better place, the most important were the stability he brought and the foundation he has laid for future success,” Linda Maeinschein, chair of the Northwest Health System Board of Trustees, said in a statement. “The achievements we’ve made during his tenure have positioned us for a successful future and we are grateful for the position we are in because of his leadership.”

McKay said in a statement that he is eager to be part of the history of Sparks Health System.

“I am excited to support the physicians, employees and volunteers in their work to provide high quality healthcare to the patients who trust their care to Sparks Health System,” McKay said. “It’s an honor to join a system with a long history of being a leader in providing high quality healthcare to the Fort Smith area.”

Prior to serving as CEO at Northwest, McKay was a Vice President at Community Health Systems Professional Services Corporation, where he supported the management of operations at hospitals across the U.S. He previously served in leadership positions at hospitals in South Carolina, Missouri, Texas and Alabama. He holds a master’s degree in Healthcare Administration from Xavier University and a bachelor’s degree in Business Administration from the University of Kentucky.

“Dan has a track record of proven success and stability at Northwest,” said Hugh Maurras, Chairman of Sparks Health System’s Board of Trustees. “He brings proven leadership skills and a familiarity with our region to the role of CEO. On behalf of the board, I look forward to working with him to continue our work to enhance the care we provide our communities.”

McKay arrives in Fort Smith just weeks after the previous Sparks CEO, Tim Schmidt, was dismissed following a racially insensitive remark he made during an employee meeting. Schmidt, who has more than 20 years experience in hospital administration and previously served as CEO at hospitals in Illinois, New Mexico and Texas, was in March named the interim Sparks CEO.

Sparks has had a tough time finding a CEO. Schmidt was the third interim or named CEO to resign or be dismissed since the January 2013 departure of CEO Melody Trimble.

Gary Blan was picked to succeed Trimble when she was promoted to president of Naples, Fla.-based Health Management Associates' Southern and Western Group. Trimble’s promotion was effective Jan. 1, 2013. HMA was then the parent company of Sparks. Blan resigned in May 2013, less than three months after being hired.

Charles Stewart was then named CEO in September 2013, but his resignation would come less than six months later.

Sparks and Summit were part of the early 2014 sale of HMA to Community Health Systems, a company whose portfolio of hospitals was nearly double the size of HMA's portfolio. Locally, CHS owns four Northwest Arkansas facilities — Northwest Medical Center-Bentonville, Northwest Medical Center-Springdale, Siloam Springs Regional Hospital and Willow Creek Women's Hospital in Johnson.

The Sebastian County Election Commission on Monday (June 30) voted to hire former County Election Coordinator Jerry Huff as a consultant to work on elections through the end of this year even as the commission also announced Monday the hiring of Suzanne Morgan as election coordinator.

The commission has seen turmoil since the announced retirement of Huff earlier this year, with the county now having hired its third replacement for the election coordinator position since February.

The process for replacing Huff got off to a rocky start in November when an executive session was to be held for the interview of candidates that would have included numerous county officials who would not have direct oversight of the new coordinator were slated to be included in the meeting, against Arkansas' law regarding opening meetings.

A protest at the time by The City Wire resulted in the county judge ultimately complying with the law and eventually David Mansell was hired as the original replacement for Huff.

Errors made during his brief tenure, including the misspelling of U.S. Rep. Tim Griffin's name on the Republican ballots and placing candidates for lieutenant governor in the wrong place on the ballot, preceded Mansell's resignation.

The second hire to replace Huff was Robert Cowan, a former vice president at Rheem, who was hired in late May. Just weeks into his tenure in the job, Cowan resigned. In his resignation, Cowan said the position required more time than he originally anticipated, taking away from his other business interests and time with his family.

Morgan's hiring, which became official early last week, now makes her the third replacement for Huff.

In a specially called meeting of the Election Commission to make official Huff's hiring as a consultant, County Judge David Hudson said Huff would be on board to make sure the election runs smooth under Morgan's new leadership.

"(Huff will be) training and assisting Suzanne," Hudson said. "Suzanne will be the handling the action.”

Hudson elaborated, saying while all actions necessary to keep the county on schedule with regard to printing ballots and other items necessary before election day ever comes.

"Really the intent of this is to stay current, to stay ahead and be proactive and have solid elections through the rest of this year," he said.

Huff's fee for his consulting will be around $12,000 for the year, Hudson said, adding that the fee is determined on a per election basis instead of a flat hourly rate.

Election Commission Chairman Lee Webb said the majority of the funding to pay for Huff's consulting services will be covered and built into the election costs without having to tap much money from the county's general fund.

Once the electoral runoff, if needed, is completed later in November and the election is certified, Huff's consulting services with the county will end, Hudson said.

With a touch of fanfare, Arkansas lawmakers made quick work of the first day of the 89th General Assembly’s second extraordinary session.

The House of Representatives met in the Old State House Museum, while State Senators remained in their usual confines at the State Capitol. The House is undergoing a massive renovation project and is unusable for official business.

House Speaker Davy Carter, R-Cabot, opened the proceedings for an expected three-day special session called by Gov. Mike Beebe to deal with a public school employees insurance crisis, prison overcrowding and lottery restrictions. Carter reminded House members that the Old State House was the place where the Arkansas Constitution was adopted in 1874.

“Let’s continue to make our state proud with the work that we do here in the coming days,” Carter told his fellow legislators, which included Reps. Charlene Fite, R-Van Buren, and Tommy Thompson, D-Morrilton, who were dressed in 19th century attire.

The House and Senate Insurance and Commerce committees passed measures to deal with the insurance program for teachers and other public school employees. A task force has been working diligently for months — and in a previous special session a few months ago — to craft solutions to an expected $36 million funding shortfall.

The bills that cleared committee would:
• Transfer $4.6 million a year from school district payroll tax savings to health insurance plans;
• Prevent part-time employees and spouses of employees with other health insurance options from participating in the plan;
• Test dependent eligibility; and
• Curtail elective bariatric or gastric-bypass surgeries.

Those bills will be taken up by their respective chambers on Tuesday and should go to companion committees for debate.

Rep. Harold Copenhaver, D-Jonesboro, said in a Talk Business & Politics interview on Sunday (June 29) that the insurance task force would look at private bidders for school district health insurance after the session.

On the prison funding front, the Joint Budget Committee cleared two bills aimed at freeing up $6.3 million for new prison beds. The bills would take a small percentage of money off the top of general revenues currently earmarked for constitutional officers and other expenses. The move would steer the money on an ongoing basis directly to the corrections system for 600 new state prison beds.

The funding is expected to ease prison overcrowding at the state and local level, but lawmakers will still be facing the construction of a new state prison in the 2015 legislative session.

Gov. Mike Beebe (D) also added a provision to the call for this special session to restrict the State Lottery Commission from adding video monitor games, such as keno. Originally, lawmakers planned to completely restrict lottery officials from expanding keno-style games. In a compromise, they agreed to put a moratorium on the lottery commission’s plans until March 13, 2015.

The delay is expected to allow lottery officials, legislators, and other gambling venue representatives to discuss the issue more substantively.

State lawmakers are expected to wrap up the special session on Wednesday.

After a rough start to 2014, all but six of the 17 publicly held companies in Arkansas posted higher stock prices through the second quarter ending June 30.

The biggest gainers in the first half of this year were transportation stocks. Van Buren-based USA Truck (NASDAQ: USAK) led the pack as its shares rose 47.66% through the first six months of this year. USA Truck shares closed Monday at $18.59, gaining $6 so far this year. (See box at end of story for list of stocks and their price changes.)

Tontitown-based P.A.M Transportation (NASDAQ: PTSI) also turned things around with a 34.75% increase in its stock price since the start of 2014.  P.A.M shares closed Monday, June 30 at $27.96, picking up more than 7% a share since the year began.

The largest drop came from Little Rock-based Acxiom which saw its share price plummet nearly 41% in the first half of 2014.

The equity markets have tread lightly in 2014, with the Dow Jones Industrial Average (DJIA) beginning the year at 16,441.35, and finishing the first half (June 30) at 16,826.50, up just 2.34%. All but 0.1% of that gain came in the second quarter. The broader S&P 500 began 2014 at 1,831.98 and ended the second quarter at 1,960.23, a 21.39% gain, and its sixth consecutive quarter for growth.

Analysts cite several reasons why U.S. stocks had a bullish second quarter. Short-term interest rates remained near zero and there is continued pressure on longer-term bonds. Reports of global inflation moderating at low levels and stable earnings despite a slower than-expected first quarter growth have kept investors in the game.

Wells Fargo economists believe the economic growth needs to pick up the pace to 3% or so to keep the equity markets moving upward.

THE UPS
Fort Smith-based ArcBest Corp. (NASDAQ: ARCB), the parent company of less-than-truckload carrier ABF Freight System, closed the second quarter at $43.51, up 28.65%  compared to the Jan. 2 closing price of $33.82. ArcBest officials have said growth in the non-asset businesses are necessary to diversify the company’s revenue stream and to help reach a goal of $3 billion in revenue in 2014.

LIttle Rock-based Dillard’s (NYSE: DDS) posted a strong first half of 2014, while other retailers have struggled. Shares of Dillard’s closed the second quarter at $116.61, up nearly 21% so far this year.

Springdale-based Tyson Foods (NYSE: TSN) closed the second trading quarter at $37.54, up 13%. The meat giant recently sacrificed share price gains with the announcement to buy Hillshire Brands for $8.55 billion, the largest deal in history for the meat industry. Tyson shares traded as high as $44 per share in early June, ahead of the proposed Hillshire deal.

Little Rock-based Bank of the Ozarks (NASDAQ: OZRK) ended the quarter at $33.45, a healthy 18.79% gain this year. Bank of the Ozark shares recently split two for one on June 23. In the second quarter Bank of the Ozarks closed a deal with Summit Bank.

Pine Bluff-based Simmons First (NASDAQ: SFNC), which also is expanding through acquisition, ended the first half of 2014 at at $39.39, up 8.4% over the Jan. 2 closing price of $36.37. In the second quarter the bank announced the purchase of two banks, one based in Tennessee and one in Missouri. 

Eldorado-based Murphy Oil and Murphy USA were up 4.36% and 16.65%, respectively through the first half of 2014. Little Rock-based Windstream also produced double-digit gains this year on improving revenue.The share price closed Monday at $9.96, up 24.34% from the $8.01 closing price on Jan. 2.

THE DOWNS
Seeing share price declines were Little Rock-based Acxiom (down 40.7%); Bentonville-based America’s Car-Mart (down 5.74%); El Dorado-based Deltic Timber (down 9.43%); Conway-based Home Bancshares (down 9.74%); Lowell-based J.B. Hunt Transport Services (down 3.68%); and Bentonville-based Wal-Mart Stores Inc. (down 4.87%).

J.B. Hunt Transport (NASDAQ: JBHT), the largest, most diversified logistics company in this report, saw its shares close the second quarter of 2014 at $73.76, Shares are down 3.68% so far this year, following expectations of  lackluster intermodal volumes related to lingering winter stores around Chicago, a major hub for Burlington Northern Santa Fe. Hunt reports its second quarter earnings on July 15.

Car-Mart recently posted lighter than expected earnings to end its fiscal year 2014, citing more repossessions, fewer sales and heightened competition in the subprime auto lending sector. The buy here, pay here used car dealer said it was slowing its new store openings to 8 this year as it works to combat the onslaught on competition. 

Home Bancshares of Conway, also ended the first half of this year on a down note. The bank’s shares (NASDAQ: HOMB) closed Monday at $32.82, down 9.74%. In the recent quarter Home Bancshares purchased Traditions Bank of Florida. Following this deal announced April 28, the combined company had $7.1 billion in total assets, $5.6 billion in deposits, $4.6 billion in loans and 156 branches across Arkansas, Florida and South Alabama.

Wal-Mart Stores (NYSE: WMT) struggled with tepid U.S. sales in the first quarter and weather-related charges that lowered profits compared to street expectations. The retail giant expects a stronger second half of the year. Wal-Mart shares dipped 4.87% in the first half of this year to close Monday at $75.97. The retailer remains committed to expanding its small store growth, keeping prices low and expanding its services platform.

Independence Day vacationers looking to hit the crowded highways during the long Fourth of July weekend will have to shell out a little more of their hard-earned dollars for fuel in Arkansas and the rest of the U.S., industry analyst say.

U.S. drivers will pay the most expensive July 4th gas prices since 2008, primarily because Iraqi violence has increased global petroleum costs, the AAA said in its monthly gasoline report released on Monday.

“Most drivers are paying about 15-20 cents more per gallon than expected heading into the busy Independence Day weekend due to market fear about Iraq,” said Avery Ash, AAA spokesman. “It is frustrating that events overseas will make it more expensive to celebrate Fourth of July here at home.”

In Arkansas, Fourth of July motorists will pay about $3.48 for a gallon of regular unleaded up 17 cents from year ago pump prices of $3.30 per gallon and 19 cents higher than the Memorial Day weekend in late May, the traditional start of the summer vacation season. This year, the Independence Day holiday travel period is defined as Wednesday, July 2 to Sunday, July 6.

ARKANSAS METRO PRICES
As of today, the national average price of gas is $3.70 per gallon, up 21 cents from a year ago, according to the U.S. Energy Information Administration. The national average on July 4 in previous years was: $3.48 (2013); $3.34 (2012); $3.57 (2011); $2.74 (2010); $2.62 (2009); and $4.10 (2008).

Pump prices in Arkansas’ metropolitan areas range from a low of $3.42 per gallon in the Fayetteville-Springdale-Rogers and Fort Smith area to a high of more than $3.50 per gallon in the Texarkana area, according to AAA’s daily fuel gauge. Motorists in the Little Rock-North Little Rock area and Pine Bluff will pay an average of $3.46 and $3.47 and a gallon to fill up their tanks, respectively.

Drivers choosing to fill up the tanks with a higher-grade of gasoline should expect to pay an average premium of $3.77 a gallon across the state. Big rig drivers and other diesel fuel users will see pump prices at about $3.67 a gallon, up six cents from a year ago.

As those record numbers of families take to the road for some rest and relaxation, the state Highway and Transportation Department warns Arkansas drivers and motorist traveling through the Natural State they will likely face work zones and possible delays due to increased traffic volume during the long holiday weekend. There are extensive ongoing highway improvements across the state and “with those improvements come work zones,” the department said in a news release on Monday. To aid holiday travel, the state Highway Department said it has worked to open as many lanes as possible.

Still, drivers are urged to plan ahead by visiting IDriveArkansas.com for the latest travel information. The website includes live traffic flow, weather information, and details on construction zones. Travelers can also follow the department on Twitter @AHTD.

NATIONAL TRAVEL ESTIMATES
AAA Travel projects 41 million Americans will journey 50 miles or more from home during the Independence Day holiday weekend, a 1.9% increase from the 40.3 million people who traveled last year and a nearly 14% increase compared to the Memorial Day holiday weekend. The majority of travelers, more than eight in 10 (34.8 million), will travel by automobile, the highest level since 2007.

AAA Chief Operating Office Marshall Doney said notwithstanding high pump prices and crowded highways, those factors will not have a significant impact on the number of people traveling. However, it could result in some consumers cutting back on dining, shopping or other trip activities.

Doney said the recent spike in consumer spending is primarily due to increasing credit, rather than rising incomes. Consumers have been hesitant to add to their credit card balances the past several years, but continued improvements in the employment picture and rising home values means they are starting to feel more comfortable taking on debt, he said.

In addition to consumer spending, a boost in consumer confidence and the employment outlook are driving more Americans to take a road trip.

“Steady improvement in the economy has spurred increased consumer confidence and spending,” Doney said. “Optimistic Americans are more willing to take on debt this year, dusting off their credit cards to pay for a much-needed Independence Day getaway.”

The Fort Smith metro jobless rate for May rose back above 6%, with the regional workforce declining 3.51% and the number of employed down 1.97% compared to May 2013.

May’s jobless rate in the metro area was 6.3%, above the 5.9% in April and well below the 7.8% in May 2013. May’s data is subject to revision in future reports from the U.S. Bureau of Labor Statistics.

The size of the Fort Smith regional workforce during May was 127,054, up from 126,506 during April, and well below the 131,677 during May 2013. The labor force reached a revised high of 140,253 in June 2007, meaning the May workforce size is down 9.4% from the peak number.

The number of employed in the Fort Smith region totaled 119,003 in May, up from 118,984 compared to April but an estimated 2,398 jobs below the 121,401 employed in May 2013.

All eight metro areas in or connected to Arkansas had jobless rate increases in May compared to April, but had jobless rate declines compared to May 2013. During May, the lowest metro jobless rate in the state was 4.9% in Northwest Arkansas and the highest rate was 8.4% in the Pine Bluff area.

FORT SMITH METRO NUMBERS
Unemployed persons in the region totaled an estimated 8,051 during May, up from the 7,522 during April, but well below the 10,726 during May 2013.

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

Jobs in the Trade, Transportation and Utilities sector — the region’s largest job sector —  totaled 24,300 in May, unchanged compared to April, and above the 23,700 during May 2013. Employment in the sector reached a high of 25,700 in December 2007.

Employment in the region’s tourism industry was 9,700 during May, up from 9,400 in April and above the 9,500 in May 2013. The sector reached an employment high of 9,800 in August 2008.

In Education & Health Services, employment was 16,500 during May, unchanged from April and below the 17,100 during May 2013. Annual average monthly employment in the sector has steadily grown since 2005 when it reached 14,000. In 2012 the average was 17,000, but fell slightly to 16,800 in 2013. Employment in the sector reached a record 17,300 in October 2012.

In the Government sector, employment was 19,700 during May, up compared to 19,600 in April and above the 19,600 in May 2013.

NATIONAL NUMBERS
Unemployment rates were lower in May than a year earlier in 357 of the 372 metropolitan areas, higher in 11 areas, and unchanged in four areas, noted the broad BLS report.

The U.S. unemployment rate in May was 6.3%, down from 7.5% from a year earlier. Arkansas’ jobless rate was 6.4% in May, down from 6.6% in April and down from 7.5% in May 2013.

Oklahoma’s jobless rate during May was 4.6%, unchanged compared to April, and down compared to 5.4% in May 2013. The Missouri jobless rate during May was 6.6%, unchanged compared to April and below the 6.7% in May 2013.

ARKANSAS METRO AREAS
Fayetteville-Springdale-Rogers
May 2014: 4.9%
April 2014: 4.5%
May 2013: 5.8%

Fort Smith
May 2014: 6.3%
April 2014: 5.9%
May 2013: 7.8%

Hot Springs
May 2014: 6.4%
April 2014: 6.1%
May 2013: 7.6%

Jonesboro
May 2014: 5.8%
April 2014: 5.6%
May 2013: 7.1%

Little Rock-North Little Rock-Conway
May 2014: 5.8%
April 2014: 5.5%
May 2013: 6.7%

Memphis-West Memphis
May 2014: 7.5%
April 2014: 7%
May 2013: 9.2%

Pine Bluff
May 2014: 8.4%
April 2014: 8.3%
May 2013: 9.5%

Texarkana
May 2014: 6%
April 2014: 5.8%
May 2013: 7%

FORT SMITH METRO AREA HISTORY
Past annual average unemployment rates
2013: 8%
2012: 7.7%
2011: 8.3%
2010: 8.2%
2009: 7.9%
2008: 4.8%
2007: 5.3%
2006: 4.9%
2005: 4.5%
2004: 5.2%
2003: 5.5%
2002: 5%
2001: 4.2%
2000: 3.7%

Three terms will be enough for Van Buren Mayor Bob Freeman, who announced his intent Tuesday (July 1) to seek his third and final term as mayor.

Freeman, who followed the late Mayor John Riggs in office in 2006 after Riggs concluded three terms of service, said there is a lot of work yet to be done should he win a third term. He said a third term would allow him to finish what he started with the citizens of Van Buren, specifically citing several projects funded by a one cent sales tax passed in 2012.

"The fire station is close to being opened up. We'll do a ribbon cutting for that in the near future. Our police station's well underway with construction. It's going to be a great addition to our community. The senior center — they're moving some dirt, but the official groundbreaking again will be taking place before too long. Those two projects, the police station and the senior center, will open up and complete into next year."

Parks projects are also an item of top priority for the mayor, retired Army officer and former banker. On the same day Freeman confirmed his plans to seek a third term, the city's Parks and Recreation Commission was scheduled to meet with architects and engineers working with the city to create its first parks master plan.

"Those are projects that I'd like to be able to stay here, see them through their completion and the continue to plan and build into the future," he added.

While touting the local projects he feels have been a success, the mayor said his term has also been about finding success and cooperation on a county and regional level. He specifically cited work by the Regional Intermodal Transportation Authority as well as work with Crawford County Judge John Hall in getting the city and county's levies certified by the Little Rock District of the U.S. Army Corps of Engineers as accomplishments only brought about by working together.

"I want to continue to build on those cooperations. I'd like the opportunity to serve this community for the next four years and to continue that, to build on that and then be able to pass that on to whoever the next person is that's going to sit in the seat of the mayor of Van Buren," Freeman said.

The accomplishments the two-term mayor touts as he talks about his time in office came in spite of the nation's worst economic conditions since the Great Depression following the 2008 financial crisis, which nearly saw the collapse of several banks and slowed economies, including Van Buren's, to a grinding halt for long periods of time.

Freeman said his background as an Army officer dealing with programming, planning and budgeting and his post-Army career in banking helped the city get through the toughest of the Great Recession, though he admits it was not an easy task.

"Well, you take that (Army background) and then my background in banking, I think —no, I don't think — I know I came in here at the right time because of what happened and the downturn. When I got here, the year before and years leading up to (2006), things were just great. Things were going and then all the sudden, things fell off the table. Sales tax revenues went flat, in fact, went down. So I was able to look at and make tough decisions. I don't like saying, 'Look, ok guys. You're not getting a pay raise. We just can't do it.' I don't like doing that, but you've got to make those decisions so you're not turning around and saying, 'Yeah, we're going to have a pay raise so everyone can feel good about this,' and then you turn around three months later and go, 'OK. We've got to layoff three firemen. We've got to lay off three police (officers). You just can't do that."

He said his job as mayor meant making the tough calls, only filling necessary positions and freezing hiring on others and looking at the city's financial position on a daily basis to keep the ship afloat until the economy recovered. And the actions he said were taken during the Great Recession are actions he finds himself repeating even as the city has come out of the worst of the financial crisis.

"It was not an easy process. And you know, even today, we're still not out of the woods. And I'm not saying the city's struggling financially. No. But my job is to manage the city's resources and I look at the budget and the numbers on a daily basis. I have to because I just don't want to take my eye off of that. And it's important now because we do have these projects that are ongoing. We have hired the additional firemen that we need for that fire station. We're still continuing to look at and say, 'If we're going to do parks improvements, how are we going to pay for those?' Not just out of the bond, but otherwise."

Reflecting on the last eight years and the possibility of another four in office, Freeman said he would not seek elected office again. The mayor said he had no ambitions to run for higher offices and instead was looking forward to enjoying retirement, noting that should he win and complete a third term in office, he would be 62 when he retires. His retirement, he said, would be spent visiting his children and traveling with his wife. And he notes specifically the death at a young age of both of his parents, as well as his predecessor in the mayor's office, John Riggs, who died in 2007 at the age of 53.

"Maybe it's a personal thing, but I think 12 years as a mayor, in my particular case, I think 12 years is enough to pass it on to someone else. And I know mayors across the state who have been in there for 20 years or whatever. … And what I want to do is take it to a new level of what I received. You know, I received it in good shape. I want to take it to the next level and I want whoever comes in behind me to take it to the next level and to continue to build on that."

Besides Freeman, City Attorney Candice Settle and City Clerk/Treasurer Barbie Curtis are both up for re-election to four year terms this year. All the city's six alderman are also up for re-election to their two year terms, as well.

According to the Crawford County Clerk's office, filing for the positions opens July 25 and closes at noon on Aug. 15. The election will be held Nov. 4 with a runoff scheduled for Nov. 25, if needed.

Besides Freeman, no other candidates have yet declared their intentions.

July 4 is one of the most widely observed American holidays, with 153 million consumers expected to celebrate with food this year for an estimated $6.2 billion spend, according to the National Retail Federation and Prosper Insights & Analytics.

This year’s survey indicates the average household will dole out $68.16 on burgers, snacks and other food for the occasion. This is the first year the survey tracked food spending.

Meat prices continue to rise to record levels as shrinking cow and hog herds have packers paying more for slaughter livestock and passing those costs to the consumer. The U.S. Department of Agriculture reports the all fresh beef retail price hit $5.45 cents a pound in May, up 10.5% from a year ago. Beef prices have risen consistently over the past three years and are expected to jump 6.5% for all of 2014, compared with gains of up to 3% for pork and chicken.

The July 4 holiday is typically the busiest season for beef sales, but consumers are backing off red meat purchases at the higher prices. In the first four months of this year, U.S. beef sales volume fell 0.6% from a year earlier after rising in the last two quarters of 2013 at 18,000 grocery stores, supermarkets and other retail outlets tracked by Nielsen Co. In contrast, sales volumes for chicken rose 1.9%.

Grocers from Kroger to Wal-Mart Stores have added smaller packages of beef and more lower-priced cuts to their meat cases for consumers watching their grocery budgets. Analyst Steve Kay, with Cattle Buyers Weekly, said grocers are not featuring beef, nearly as often as they have in past summers, partly because supplies are down and costs are way up.

Restaurants are also beginning to respond to the pinch of rising beef prices. Hardees began scaling back the size of its burgers last year and launched a new chicken sandwich alternative in May.

Texas Roadhouse operates around 420 restaurants said it raised its prices 1.5% in December, while Chipotle Mexican Grill raised prices for beef-based entrees by 8% in May. Chicken entrees went up 4% and pork-based items rose 6% as the burrito chain cited rising protein prices. It is Chipotle’s first price hike in three years.

Meat packers like Springdale-based Tyson Foods have moved to shorter term contracts with food service customers in order to pass along higher wholesale prices quicker.

JULY 4 TRAVEL, FIREWORKS
While two out of three consumers will celebrate Independence Day with food, less than half will partake in fireworks and parade celebrations, according to the Prosper survey.

Roughly 105 million survey respondents said they will attend a fireworks show this year and 29 million plan to attend a holiday parade. Prosper notes that participation in these two activities are down slightly from a year ago.

The friday holiday makes for a three-day weekend which has more consumers planning travel vacations this year. Prosper said 32 million consumers will take a vacation during holiday period, the highest level in the survey’s history. About 20% of Millennials surveyed said they plan to vacation during the holiday. Consumers overwhelming (70%) said the price of gasoline will not impact their July 4 holiday spending.

Gas prices have recently spiked higher making this July 4 holiday the most expensive for drivers since 2008. AAA reports the average gas price in the U.S. is around $3.58 per gallon, up 17 cents from last year. The recent uptick in price is linked to political unrest in Iraq, which has sent crude oil prices higher.

According to GasBuddy.com, regular gasoline prices are averaging $3.45 in Arkansas, up 8 cents in the last month and 5% higher than a year ago. 

GasBuddy.com expects U.S. gas prices will top out this year at $3.75. 

Demand this summer is brisk, but it won’t likely match last year’s consumption rate. Year-to-date, U.S. motor fuel demand has averaged about 365 million gallons per day, up about 1.7% from the same period in 2013, according to GasBuddy.com. The lower demand is attributed to less driving by Millennials and more fuel-efficient cars and trucks on the road.

A lawsuit filed Tuesday (July 1) is yet another twist in the question over legal billings from the Daily and Woods Law Firm to the city of Fort Smith.

The lawsuit — filed by Fort Smith resident Jack Swink against City Clerk Sherri Gard, City Directors Mike Lorenz, George Catsavis, Keith Lau, Vice Mayor Kevin Settle and the city of Fort Smith — alleges that recent attempts to remove a set of resolutions from Fort Smith Board of Directors meeting agendas was in violation of the Arkansas Freedom of Information Act.

The resolutions in question were removed most recently on Thursday (June 26) and, if passed, would have directed the city to hire an independent auditor to audit legal billings and also establish a committee to determine whether or not the city should continue with contracted legal services or hire in-house counsel.

City Director Philip Merry had twice requested the items be placed on the agenda following allegations by attorney Matt Campbell on his Blue Hog Report blog that the city was being billed for services not performed by Daily and Woods and was being overbilled for other services.

In order to remove the items from Tuesday's agenda, City Director Mike Lorenz cited Section 2-31(4) of the Fort Smith municipal code in his request submitted at 11:04 p.m. on Wednesday, June 25, in an e-mail to Gard. The code allows an item to be removed from the agenda at the direction of four city directors. An e-mail from Gard dated Thursday at 8:19 a.m. shows she submitted Lorenz's request with the following request to all city directors.

"Such requires concurrence of four (4) directors; therefore, please respond to Director Lorenz's request either via response to this e-mail or call my office, 784-2207."

The lawsuit states that Gard's polling of the Board was a violation of the law.

"Indeed, the Arkansas Supreme Court has held that the polling of individual board members via telephone, rather than having a meeting to discuss an issue, violated the AFOIA (Arkansas Freedom of Information Act) because there was neither notice as required by the AFOIA nor the opportunity for the public and press to attend," the suit reads.

The suit notes the incident from Thursday, as well as a previous successful attempt on June 11 to remove the items from the agenda for the June 17 meeting.

At the Board of Directors meeting Tuesday evening, Swink's attorney Joey McCutchen said the law is clear, adding that city cannot use Gard to poll directors.

"As the city has been through on at least two different lawsuits, all the way up to the Supreme Court — the lawsuit that I filed, the lawsuit that (Fort Smith resident) David Harris filed — I fail to see how what the city is doing now is distinguishable from those two cases. That is a straw man, or a straw person if you would, is polling Board members and it's trying to circumvent the Arkansas Freedom of Information Act."

McCutchen added later: “I think it's disturbing that they continue to go down the same path thinking that they can use a straw man to get around our transparency laws. ... If they're not transparent, then they can continue to expect to get sued."

City Administrator Ray Gosack said he had not yet seen the lawsuit and would not comment, though he did say the city is acting in a transparent fashion.

"It's a procedure that's been in place for a number of years in Fort Smith and it's been used approximately seven times in the last two years and times before that. So it's a procedure that has been used in the past and no one's ever raised a question in the past about transparency or openness. You know, it's a certainly a procedure. … The Board has the ability the manage agenda preparation, as it should, for its meetings and that's part of the procedure."

Quoting an e-mail from City Communications Manager Tracy Winchell, the following are the previous dates and topics associated with ordinance use dating back to Jan. 22, 2013:
• March 5, 2013 groundwater wells related to Whirlpool TCE contamination;
• May 7, 2013 executive session (planning commission appointment);
• July 24, 2012 (study session) residential sanitation service item;
• November 20, 2012 animal control item;
• June 18, 2013 board of directors retreat location;
• February 26, 2013 (2 items) aquatic center & administration matter; and
• January 22, 2013 (study session) proposal to relocate city offices.

During the official's forum of the Board meeting, City Director Pam Weber did make a motion to introduce a repeal of the ordinance and was seconded by Merry. Mayor Sandy Sanders indicated that the item would be placed on the July 8 Board agenda. The item again came up during the town hall meeting after the regular Board meeting, where Position 7 Board candidate Sherry Toliver read a prepared statement in which she took the Board to task for using Section 2-31(4) to remove the items from the agenda.

"Our Board of Directors' top responsibility is guiding Fort Smith's economic development and sustaining our City's reputation as the regional economic leader of the future. The Board majority's duck-and-cover strategy of managing this situation is counterproductive and risks embarrassing our City in a statewide media debacle," her prepared statement read.

"Effective public relations has the potential to greatly reduce the amount of damage to our City. Addressing this situation publicly and modernizing business practices as needed will help restore trust in our elected officials and those we hire on behalf of the tax-paying citizens of Fort Smith," the statement continued. "With millions of dollars paid by the City to Daily & Woods Law Firm since 1968, Fort Smith taxpayers deserve no less. And all vendors should know that we closely watch our accounts payable."

McCutchen said he expects to quickly settle the lawsuit with the city without having to take the fight to higher courts.

"I'm probably going to meet with the city attorney early next week, but we would like to get this lawsuit done quickly, like within a matter of days, not months."

He said ultimately, it would be up to a circuit judge to decide whether the city violated the Freedom of Information Act.

Campbell, who attended Tuesday's Board meeting, said his belief is that the Board is moving counter to the will of the people.

“I mean, the response I've gotten has been 99% in favor of, 'Yeah, we need to look at these bills.' So, it's almost like the Board is doing whatever they want to do and then throwing up excuses after the fact. 'Oh, he's just trying to district from the lawsuits.' No, I found out about this stuff because of the lawsuits,” Campbell explained. “But I was blogging way before I represented these guys and I'll be doing it long after and it's not really trying to distract from anything. I'm just pointing out, oh, by the way, you guys are getting screwed over by your city attorney. It has nothing to do with the lawsuit."

32 hours. Three calendar days. Two locations. One special session. Arkansas lawmakers wrapped up a short special session passing bills to address a public school employee insurance crisis, prison overcrowding and lottery restrictions.

After convening at 4 p.m. on Monday (June 30), state legislators finished their extraordinary session business just past midnight on Wednesday (July 2). The three calendar day session met a threshold requirement for a special session call and provided efficiency for quick passage to several agreed-upon measures.

"The efficiency of the session was created by the work everyone did in advance of the session. We essentially had a virtual session before the session," said Sen. Jonathan Dismang, R-Beebe, who will serve as Senate President Pro Tempore in the 2015 regular session.

While the State Senate met in its usual capitol chamber, the Arkansas House met at the Old State House Museum, the former state capitol. The House chamber is undergoing a massive renovation and was unusable for session business. The historic background was appreciated by House members, but several said they would be just fine returning to their normal place of business next January.

"The first five minutes was pretty cool, understanding the history of it," said Rep. Joe Jett, D-Success. "After that, the realization of the hard chairs, the room being hot, then trying to get parking on Markham Street and being late for meetings – I've decided state representatives are a little spoiled."

To shore up an expected $36 million shortfall in the teachers insurance fund, legislators passed measures crafted by a task force that has been studying the issue for months. The bills included:
• Transferring $4.6 million a year from school district payroll tax savings to health insurance plans;
• Preventing part-time employees and spouses of employees with other health insurance options from participating in the plan;
• Testing dependent eligibility; and
• Curtailing elective bariatric or gastric-bypass surgeries.

Lawmakers are also planning to ask for private bids on the public school employee insurance fund after claiming that the embattled plan still is financially troubled. Teachers and public school employees will see some plans rise by a significant percentage, while others may fall.

Legislators also freed up $6.3 million for 600 new prison beds to deal with jail overcrowding at the state and local levels.

A compromise was struck on plans to restrict the state lottery's expansion into video monitor games. Originally, lawmakers planned to completely restrict lottery officials from expanding keno-style games. In a compromise, they agreed to put a moratorium on the lottery commission’s plans until March 13, 2015.

The delay is expected to allow lottery officials, legislators, and other gambling venue representatives to discuss the issue more substantively.

Gov. Mike Beebe (D) is expected to sign all of the bills into law.

Tyson Foods and Hillshire Brands on Wednesday (July 2) confirmed they have entered into a definitive agreement under which Tyson will acquire all outstanding shares of Hillshire for $63 per share. The all-cash transaction is valued at approximately $8.55 billion, including Hillshire Brands' outstanding net debt. The deal is expected to be completed by Sept. 27.

Hillshire investors will received a tender offer within the next 10 days

As The City Wire has previously reported, Tyson Foods will make on behalf of Hillshire Brands a payment of the $163 million termination fee associated with the termination of Hillshire Brands' planned merger with Pinnacle Foods. The board of directors of Hillshire Brands has accepted the notice of termination received from Pinnacle Foods and the previously announced transaction has been terminated.

"By investing in Hillshire Brands and its collection of leading brands, we have a unique opportunity to transform an important segment of our business, and position Tyson Foods to meet American consumers' growing demand for protein at breakfast and throughout the day,” said Donnie Smith, president and CEO of Tyson Foods. “We operate in a competitive and complex marketplace that demands bold steps to remain an industry leader. I am confident that together Tyson Foods and Hillshire Brands have the right products and the right people to create years of enhanced shareholder value and ensure more choices for our customers and consumers.”

The pro forma company will allow Tyson Foods to add such names as Jimmy Dean, Ball Park, State Fair and Hillshire Farms to Tyson’s blended mix of name and private label brands.

Smith had previously noted that Tyson was attracted to Hillshire in part because of the strength the merger would bring in the growing breakfast category, where the Springdale meat giant has been trying to capture market share with its own DayStarts products.

The combined companies will leap over ConAgra and take the No. 2 market share ($3.3 billion) in the frozen value-added category, according to the meat companies. Tyson now has the No. 3 spot with $2.4 billion, and Hillshire ranks eighth at $1.3 billion.

The prepared foods segment is now 9% of Tyson Foods’ $35.4 billion in annual sales. If the deal happens, the combined companies would post annual revenue of around $39.4 billion, with 18% of that coming from prepared food sales.

Sean Connolly, president and CEO of Hillshire Brands, said, “After thoughtful consideration, our board of directors concluded that a combination with Tyson Foods represents a unique opportunity to provide shareholders with significant and immediate value while also positioning our business for continued success ... I am confident that we have found an excellent partner in Tyson. We firmly believe that our combined global platform will be extremely well positioned to capitalize on the substantial growth opportunities in this market in the years ahead.”

Smith has said the two cultures are a great fit and Stephens Inc. analyst Farha Aslam agrees. She said growth among U.S. food companies is hard to achieve because Americans are spending about all they are able on food. She said the food industry is seeing several consolidations because interest rates are low and food companies generate lots of cash.

“Hillshire is a strategic fit for Tyson Foods, the largest acquisition in Tyson’s history and it will take some time for them to digest it all.” Aslam said.

Other analysts believe Tyson overpaid for Hillshire given the final $63 bid came at about a 70% premium to Hillshire’s trading value prior to interest from outside suitors Tyson Foods and Pilgrim’s Pride.

“We believe Tyson stock will be dead money at best for the next 12 months as it copes with the hangover of paying such a big price including an issuance perhaps of $1.6 billion of equity,” noted Robert Moskow, an analyst with Credit Suisse.

Moskow was one of two Wall Street analysts to downgrade Tyson Foods as a result of the deal.

“At the price of $63 per share, we believe Tyson destroyed $2 billion in value. We believe fair value for Hillshire was $47 per share including the $1.3 billion value of synergies,” Moskow said.

Tyson shares reacted favorably with today's announcement closing at $38.96, up $1.09. Tyson shares are down from $44.24 prior to the pursuit of Hillshire Brands.

Arkansas ends its 2013-2014 fiscal year with a surplus of $78.7 million on total tax collections of $6.242 billion. The surplus was well below the $299.5 million surplus in the previous fiscal year.

The fiscal year total revenue was 0.5% above the previous year and was 0.2% above forecast. The gain marks four consecutive years of gains in gross tax collections.

“The fiscal year ended above forecast and above the budgeted amount as a result of stable collections in gross revenue and lower-than-expected payouts from gross general revenue in Individual Income tax refunds and other deductions,” John Shelnutt, head of the Department of Finance and Administration’s Economic (DFA) Analysis & Tax Research division, said in his report released Wednesday (july 2). “Weak absolute growth in year ago growth measures was attributable to adverse comparison to the income shifting into tax year 2012 liability that benefited fiscal year 2013 collections. Aside from special factors, the economic-related Withholding Income tax payments grew 2.0 percent in Fiscal year 2014, largely in line with employment, personal income, and inflation indicators over the same period.”

Collections have declined relative to how the fiscal year began. The gross collections were up 3.4% after the first six months of the fiscal year, and 0.9% above forecast. After the first four months of the fiscal year, the gross revenue was up 4.1%.

Individual income tax collections for the fiscal year totaled $3.111 billion, down 1.1% from last year and just 0.3% above the budget forecast.

Fiscal year sales and use tax collections were $2.173 billion, up 2.3% above last year but 1.6% below the budget forecast. Sales and use tax collections, considered a barometer of consumer confidence, also ended fiscal year 2013 on a down note. Collections in the segment for the fiscal year totaled $2.124 billion, up just 1.1% compared to the 2012 period, and 1.4% below forecast.

Income taxes and the sales and use tax collections are the two primary sources of state revenue.

Corporate income tax collections in the fiscal year totaled $440.2 million, up 2.1% compared to last year and 2.6% below forecast.

JUNE NUMBERS
June gross revenue was $616.4 million, down 0.8% from last year and 0.3% below forecast.

Individual income tax collections during June totaled $286.8 million, up 0.5% compared to June 2013 and matched the monthly forecast.

Sales and use tax collections during the month totaled $180.2 million, down 2% from last year and 5.5% below the forecast.

OTHER TAX COLLECTIONS
Alcoholic beverage
July 2013 - June 2014: $53.2 million
July 2012 - June 2013: $52.6 million

Games of skill
July 2013 - June 2014: $39.5 million
July 2012 - June 2013: $35.9 million

Tobacco
July 2013 - June 2014: $219.2 million
July 2012 - June 2013: $230.3 million

Insurance
July 2013 - June 2014: $118.4 million
July 2012 - June 2013: $109.9 million

COLLECTIONS HISTORY
Tax collections during fiscal year 2013 (July 2012-June 2013) totaled $6.214 billion, up 4.9% above the previous fiscal year and up 2.5% compared to budget estimates. One result of the gains was a budget surplus of $299.5 million.

Fiscal year 2013 marked the third consecutive year of year-over-year gains. Arkansas tax collections reversed a negative two-year slide in the 2011 fiscal year, with collections up 4.5% in the May 2010-May 2011 period.

State tax collections for fiscal year 2011 totaled $5.673 billion, up 4.5% above the $5.43 billion in the 2010 period.

The biggest declines in the 2009 and 2010 fiscal years were with individual income tax collections and sales and use tax collections.

U.S. Rep. Tom Cotton, R-Dardanelle, told a state chamber crowd on Tuesday (July 1) that the crumbling military situation in Iraq has led to an insurgent group more dangerous than Al-Qaeda.

Foreign policy has rarely been a topic of discussion in Arkansas' high-profile U.S. Senate race as Cotton challenges incumbent Democratic Sen. Mark Pryor.

In response to a question about Middle East instability and its potential impact on national security, the Fourth District Congressman wasted no time leaning on his military credentials while bashing President Obama's decision-making in Iraq.

"ISIS may be a greater danger today to Iraq than Al-Qaeda was on Sept. 10, 2001," said Cotton, a former member of the 101st Airborne who served in Iraq and Afghanistan.

Although not in the U.S. Senate when the U.S. went to war with Iraq, Obama in 2002 and 2003 spoke frequently against going to war with Iraq.

"For those of you who don't follow it closely, ISIS is the English language abbreviation for Islamic State of Iraq and Syria, formerly known as Al-Qaeda in Iraq, which was defeated – which the President's own deputy director of central intelligence said was defeated when he withdrew all the troops from Iraq in 2011," he said.

"Just two days ago though they changed their name, not to the Islamic State of Iraq and Syria, but to the Islamic State, which goes to show that their ambitions are not limited to Iraq and Syria," Cotton added. "Perhaps even more ominous, the leader of the Islamic State, a hardened terrorist whose been at this for decades, was detained reportedly by American and Iraqi forces during the Iraq war – he was ultimately released. As he was released, he told his American captors, 'I'll see you in New York.' That tells you all you need to know about the ambitions for the Islamic State."

Cotton described to the nearly 80 state business leaders that Islamist militants of ISIS, who are capturing cities in northern and western Iraq, are the "most well-armed and well-funded terrorist group in history."

He said their goal is to "displace Al-Qaeda as the leading umbrella terrorist organization" in the world.

"They're not just doing that because they want to run northern Iraq and eastern Syria. They're doing that because they want a safe haven from which they can launch attacks against American interests all around the world," said Cotton.

"I think this is a direct result of the President's very short-sighted decision to disregard his generals' advice in 2011 to withdraw every single troop – these troops were not going to be trigger-pullers, they weren't going to be out on the front line fighting the fight – these were planners and truckers, logistics experts and intelligence experts that would help provide a degree of professionalism to the Iraqi security forces.”

Cotton also criticized the Obama administration for failing to work collaboratively with an admittedly difficult Iraqi Prime Minister.

"That would continue to give us a source of leverage against [Iraqi Prime Minister] Nouri al-Maliki, who no doubt is a very hardened leader with whom to work. But it's the President's job to maintain relationships with those very difficult foreign leaders. Not just to wipe his hands of it because he doesn't like to have to do it. If we had those troops on the ground today, then we'd have a lot more leverage over Nouri al-Maliki. Maybe he wouldn't have fired all of his Sunni commanders. Maybe he wouldn't have replaced them with Shiite cronies. Maybe he wouldn't have created a parallel command and control structure that bypasses the traditional structure that we helped put in place. And we wouldn't see our two most mortal enemies gaining ground in Iraq. Remember, it's not just ISIS in the north. It's Iran gaining more and more influence with al-Maliki and in the South as well, which is predominantly Shiite.”

In recent days it has also been learned that Iraqi government and military officials have turned to Russian President Vladimir Putin for help. Russian entry into the situation could further complicate the entanglements related to the influence of foreign governments on the numerous wings of armed Muslim groups.

"I think it's a grave threat to our national security. Unfortunately, the President doesn't have a lot of options. I don't think that's a defense though of his path, I think its an indictment of his path,” Cotton said of the growing complexity of relations in the Middle East.

Dr. Georgia Hale has been promoted to provost and vice chancellor for academic affairs at the University of Arkansas at Fort Smith. She succeeds Ray Wallace who recently was hired as chancellor at Indiana University Southeast.

Hale was previously the dean of the College of Applied Science and Technology, a post she had held since 2009. She was also associate provost at UAFS, a position she began in December 2013. Hale had originally came to UAFS in 2004 as associate dean of the College of Business before taking the dean's position at Applied Science and Technology.

The position includes overseeing the Colleges of Health Sciences, Business, Applied Science and Technology, Languages and Communication, Humanities and Social Sciences and Science, Technology, Engineering and Math.

As provost, Hale will supervise the International Relations office, the Center for Lifelong Learning and the Babb Center for Student and Professional Development while also overseeing the creation of new curriculum and programs while working to increase the number of graduate programs available at UAFS, a press release said.

The university has been developing its first graduate program, a master's in healthcare administration, under the direction of Dr. Ray Wallace, who previously served as provost and senior vice chancellor at UAFS before leaving to take the position of chancellor at Indiana University Southeast.

The 33-hour program, Wallace said, was expected to launch in 2015, pending approval from the Arkansas Department of Higher Education and accrediting agencies.

In accepting the position, Hale said she looked forward to the position and improving graduation rates at the university.

"I am humbled to be named the chief academic officer at UAFS," she said in a press release. "I look forward to working with others on the UAFS campus to continue to grow our outstanding academic programs, as well as increase student retention and graduation rates."

Hale holds bachelors and masters degrees from Arkansas State University in Jonesboro and a doctorate from Arizona State University. Prior to joining UAFS in 2004, she had held administrative positions with Arkansas State and Iowa State Universities.

UAFS Chancellor Dr. Paul Beran said Hale's background in higher education at UAFS and other institutions made her uniquely suited to succeed in her new position.

"Dr. Hale brings a wealth of higher education experience to the position, both from our University and other colleges around the state and the nation," Beran said. "I'm confident she will advance the academic interests of our University and our students as we continue to establish UAFS as a premier regional instituion."

Hale and Wallace began their new positions at UAFS and Indiana Southeast on Tuesday (July 1), according to UAFS.

Convenience, coupons and better cuisine top the list of what shoppers said they are looking for from their local grocers, noted a recent report from PricewaterhouseCoopers.

“Shoppers told us they like traditional grocery stores, 83% of respondents said they preferred them. While they are not completely sold on online grocery shopping, many want to digitally engage with stores even after they have left,” according to PwC report.

The survey of 1,000 shoppers indicated that coupons are valued by consumers who also like loyalty programs that they would like to see tweaked with more flexibility and tangible benefits.

"Grocers can no longer rely on providing a one-size-fits-all customer experience. The next wave of millennial consumers is likely to demand individualized attention and a shopping experience that meets their specific wants and needs," said Steven Barr, PwC's U.S. retail, consumer practice leader. "We're helping our clients look closely at their target customer segments on a micro level to effectively tailor the path to purchase for each shopper when they are in and out of the store. Grocers that truly get to know their customers on a store-by-store basis can find success in the future."

More than half of the shoppers surveyed complained of long lines and crowded stores. Grocers providing a smoother in-store experience by taming congestion are likely to earn repeated shopper visits. Shoppers will increasingly look to store employees as shopping advisors, whether for additional product information, new recipe tips or purchase recommendations, as they will want increased service and assistance with decision making.

While online shopping is growing exponentially in the broader retail sector, the grocery segment is slower to make changes despite retailers from Amazon to Wal-Mart ramping up efforts to win the online grocery battle. Only 1% of survey respondents consider online shopping their primary way of getting groceries, though 92% reported having the online option available to them.

"While online channels may not become a common way to buy groceries in the near future, technology will still play a major role in the evolving grocery experience," said Sabina Saksena, managing director in PwC's U.S. consumer division.

She said shoppers expect information at their fingertips and, according to the survey, more than half of respondents want to integrate their mobile devices into their future grocery experience.

“Grocers that innovate and build on their digital channels to meet this demand will be most successful,” Saksena added.

The four main components shoppers said brings them back to the store include:
• In-store experience - 52%
• Farmer’s market fresh produce - 47%
• Deli’s and salad bars - 42%
• Convenience options like express checkout, curbside pickup - 26%.

The survey found four distinctly different shoppers, each who have varied expectations from their grocers. PwC said grocers need to be aware of these differences if they are going to stay relevant through the demographic shift.

GOURMET GORDON
Gourmet Gordon is keenly focused on food. This is generally Gen X or Baby Boomers who live in urban cities. Some 80% of them do not have children at home and they are shopping for themselves and a spouse. About one-third of the survey respondents fit the Gourmet Gordon group.

The Gourmet Gordons spent an average of $70 per grocery visit. They are looking for products that are locally sourced, non-GMO and organic and they favor freshness. They care about where and how products are sourced. They shop with a conscience and have average household income between $75,000 and$200,000.

CONVENIENCE MATTERS
Some 26% aligned with “Metropolitan Marsha,” who craves convenience. This group mostly lives in large, walkable cities like New York or San Francisco. They shop often for their entire family. They also share their shopping stories with friends and family.

This group embraces technology in their shopping habits and are four times more likely to use a smartphone to research products, recipes, create grocery lists, order delivery and provide store feedback. They don’t like standing in line and are often frustrated by parking issues. The family spends an average of $50 per trip and annual income ranges between $75,000 and $300,000.

TRADITIONAL ROUTINE
Another 25% of the respondents identified with “Traditional Tim,” a Baby Boomer living in the suburbs, mid-size cities or small towns. This shopper is likely retired and shopping for himself or a spouse.

This group spends the least on groceries per month at about $400. Price matters to them. They like smaller formats, less crowded venues and are reluctant to change. They still clip coupons and rely on newspaper circulars when preparing their shopping lists.

TOMORROW’S SHOPPER
“Millennial Mel” was identified as tomorrow’s shopper. About 17% of the respondents fit this category as Millennials living in suburbs or smaller towns, often with a roommate or parents. They don’t do much grocery shopping for now, but when they do, it’s usually for themselves, even through they rely on parents to pay for it.

The group is comprised of digital natives already craving 3D maps of stores as a top tech feature they want. They are loyal and want bonus loyalty points for sharing their thoughts and opinions with friends via social platforms. They shop nearby and like to make one stop for grocery and non-grocery items. They were the only group that cited convenience stores and pharmacies among their top three places for grabbing groceries.

Whirlpool announced Thursday (July 3) a settlement with south Fort Smith property owners in a class action lawsuit the owners filed after the company had disclosed that potentially cancer-causing trichloroethylene (TCE) had leaked into the groundwater and spread to the affected properties. TCE was used as part of a degreasing agent at the former Whirlpool facility until the 1980s, when its use was discontinued by the company.

A series of lawsuits were filed against the company in May 2013, with attorney Ross Noland of Little Rock-based McMath Woods Law Firm saying the suits were primarily focused on property damages, not health-related claims.

"There are some other elements of damage, but the primary is property damage and the reduction of value in the property," he said at the time.

Sebastian County Assessor Becky Yandell was responsible for dropping property values by an average of 41.2% in the area. She said her office had researched other TCE spills and the impact the spills have had on property values to come up with their total reductions in value.

A total of 55 land parcels, including 49 residences and three commercial buildings, had their values reduced in the plume area while properties on what Yandell called the "fringe" were also reduced, though by smaller amounts. In all, 26 parcels were impacted by the change in property values in the "fringe" area.

In an email announcing the settlement with property owners, Whirlpool Senior Manager of Global Public Relations Kristine Vernier said the resolution of what eventually became a class action lawsuit by property owners in the affected areas against the company was part of the company's ongoing commitment to the residents of Fort Smith.

"Whirlpool is pleased to have reached a resolution with property owners in a class action lawsuit related to contaminated groundwater near the former Whirlpool manufacturing facility in Fort Smith, Arkansas," she said. "As part of Whirlpool’s ongoing commitment to the residents of Fort Smith, this agreement will fairly compensate property owners, and enable both the residents and the company to focus on meeting the goals of the current remediation effort."

Following are details of the resolution, quoting from Vernier's email.
• The agreement covers current owners of property devalued in 2013 by the County Tax Assessor for tax assessment purposes as a result of groundwater contamination from trichloroethylene (TCE) released at the former Whirlpool manufacturing facility in Fort Smith, as well as some properties near the facility whose tax value assessment did not change;
• Property owners inside the area bounded by Ingersoll Ave, Brazil Ave., Jenny Lind Rd., and Ferguson St. will receive either an amount equal to the devaluation estimated by the County assessor or the devaluation as determined by an independent property appraiser;
• Class members outside this area will receive $5,000, and possibly more in the future, if TCE is detected above threshold levels in groundwater beneath their property;
• Property owners agree to allow access to their property for testing and remediation activities, record a deed restriction prohibiting new wells on their property, and release Whirlpool from property damage claims. 
• Each class member will receive formal notice of the resolution, as well as an opportunity to opt out of the agreement;
• A federal Court will be required to approve the agreement; and
• Whirlpool has agreed to pay court approved fees and costs incurred by the class members.

It is unclear how many residents in the affected plume area or in the "fringe" areas will accept the settlement offer from the company. Resident Debbie Keith, who has been organizing efforts against Whirlpool in the neighborhood north of the former facility, confirmed she would not participate in the settlement offered by the company, but declined further comment.

Fort Smith City Administrator Ray Gosack called the settlement a "positive development."

“We’ve been made aware of the announced settlement between Whirlpool and many of our citizens in the vicinity of the company’s former facility. This is a positive development that helps property owners move forward,” Gosack said in a statement.

The statement from the city also noted that Mayor Sandy Sanders and the Board of Directors “have worked diligently on keeping the public engaged in this issue. In Whirlpool’s announcement, the company acknowledges the board’s work in addressing remediation and development activities.”

The settlement comes a week after the company was granted a 30-day extension by the Arkansas Department of Environmental Quality to install vapor monitors in structures within the plume area after the company said no area residents had agreed to grant Whirlpool entry for testing purposes. The settlement, as detailed above, would give the company property access rights should the property owner agree to the settlement.

Remediation efforts do continue, though it was revealed in May that contamination caused by TCE in and around the Whirlpool facility itself may, in fact, be worse than previously indicated.

A memo from the ADEQ said it appeared as though Whirlpool knew the extent of the contamination even while working with the agency on a remediation plan.

"Although Whirlpool collected this MIP data 4-5 months ago, no discussion of the results or ramifications of this data was supplied to ADEQ," the memo continued. "MIP data is presented in real time. Whirlpool certainly knew that this area was impacted prior to submitting the final Remedial Plan at the end of February."

Vernier said the settlement announced Thursday was "another significant step forward in Whirlpool’s ongoing work with Fort Smith residents and Arkansas state regulators to fairly and effectively address this issue.

"With the engagement and support of the Fort Smith City Directors and the oversight of the Arkansas Department of Environmental Quality, we continue to push ahead with the remediation activities and redevelopment of the Whirlpool property.

Whirlpool officials are scheduled to be in Fort Smith Tuesday (July 8) to provide an update on remediation efforts to the Fort Smith Board of Directors. ADEQ Public Outreach and Assistance Division Chief Katherine Benenati confirmed Thursday that the agency would be in attendance, as well. The meeting is scheduled to take place at 6 p.m. at the Fort Smith Senior Activity Center, 2700 Cavanaugh Road.

Republican gubernatorial candidate Asa Hutchinson has been touting his jobs plan for Arkansas, which includes tax competitiveness, workforce education, health care and regulatory reform, education choice and computer science expansion.

In a Talk Business & Politics interview, Hutchinson spelled out aspects of his plan and how to pay for it, while noting his interest in reforming the state’s regulatory agencies, including a push back on the federal government.

“Whenever you look at our regulatory environment, the big problem is we’re not processing our permits for air quality, for manufacturing facilities quick enough,” Hutchinson said.

He noted that states like Louisiana and Texas fast-track regulatory permits and it makes them more business-friendly in reputation.

“This is what industry wants you to be responsive to. They want to protect the environment, let’s just move it through very quickly,” Hutchinson said. He expounded on these regulatory comments, which you can read deeper in this post.  His full interview can also be viewed at the bottom of this report.

Hutchinson faces Democrat Mike Ross, who appeared on Talk Business & Politics last week, as well as Libertarian Frank Gilbert and Green Party nominee Joshua Drake in the general election this fall.

TAX REFORM
The crux of Hutchinson’s tax reform plan includes cuts to those making roughly between $20,000 and $75,000 annually. He wants to lower the individual income tax rate for those in this income range by a full percentage point — a plan that comes with an estimated $100 million price tag.

“It’s not a complicated plan,” Hutchinson said, noting that surrounding states are lowering their rates or don’t have individual income taxes. “We are an island of high tax rates in Arkansas for individuals.”

Hutchinson said in calculating his tax cuts, he aimed to help what he feels is the segment of society needing the most relief. Higher income individuals are not in as dire a situation, and Hutchinson said there are other programs in existence to help those with income levels lower than $20,000.

“We’ve created a lot of programs for those in the lower income categories,” he said. “It’s the middle income that’s hurting.”

Hutchinson’s tax plan is predicated on growth revenue in future years and he contends that the current two-year budget surplus of $174 million can be the springboard to start his tax cut offerings.

“We have that amount in surplus so it gets you through the point you can grow into the next phase, so I think it’s a very prudent approach,” he said.

If revenue growth in future years were to taper or not meet expectations to sustain or grow tax cuts, Hutchinson said he’d have to calculate trimming or not trimming cuts based on the overall budget picture.

“You always put together the budget as a whole… I don’t believe there’s any doubt we can do what I outlined,” Hutchinson said. “If our growth does not materialize as expected, you’ve got to make tough decisions. We’ll wait and see when we get there.”

EDUCATION, COMPUTER SCIENCE
In his jobs plan, Hutchinson refers to providing more “education choice” for Arkansans, but there are few details attached. His web site offers more commentary on the subject, including charter schools, Common Core, and pre-K education.

He notes that his kids attended public schools, private schools, parochial schools and were home-schooled.

“We have to recognize that parents may make different choices in education for their children. Some parents will choose home school, private school or public charter schools as an alternative to the traditional public school setting. It is important that these options are available even though our tax-payer resources go to the public school system including public charter schools,” Hutchinson says on his web site.

Hutchinson’s Democratic opponent, Mike Ross, has advocated a significant expansion of pre-K opportunity in Arkansas including eventual inclusion for families making up to 400% of the federal poverty level (FPL). Hutchinson has limited his campaign promise to funding pre-K education for families under 200% of FPL.

A big component of Hutchinson’s education plan centers on computer science at the K-12 level. He has proposed ensuring class credits for computer science courses as well as making those courses available in every high school across the state. He contends the price tag would be less than a half million dollars to implement.

“The hardware and software is already being put in to the schools, so let’s double-utilize it for the purpose of teaching computer science,” said Hutchinson. “It doesn’t cost anything to change the law to give credit for computer science for math or science graduation credit.”

He says there will be some costs associated with retraining math or science teachers in order to have one computer science teacher in every high school across the state. His projections suggest a minimal financial impact on the state budget to achieve that.

“We’ve looked at the training costs there. You could probably do it pro bono because there are so many groups that want to teach coding for computers in high school to develop the curriculum, but the training costs would probably be a half million dollars. It’s a very modest investment for an incredible return,” Hutchinson said.

He added that an annual 5% boost in computer science coders would add 1,500 potential new trained workers into Arkansas’ labor force and would, in time, “change the economy.”

WORKFORCE EDUCATION, HEALTH CARE
Hutchinson has advocated for the creation of eight workforce councils across the state to regionally develop job plans between educational institutions, employers and workers.

To some, the plan is redundant to existing efforts but Hutchinson sees unique opportunities in different areas of the state. For instance, he said a workforce plan in Mena should look different than a strategy in Mountain Home despite both areas attempting to recruit tourism.

“[Mountain Home] has a focus on the retirement community. They have manufacturing. So their economic plan in that region will say, ‘These are the jobs that we want to prioritize for the next decade,’” he said. “If that’s your economic plan, then let’s do our workforce education to train towards the jobs.”

Hutchinson has deployed an acronym – “P.R.E.P.A.R.E.” – to summarize his workforce education goals. In his plan, “P.R.E.P.A.R.E.” suggests providing resources, producing students with skills in demand, and retaining and growing jobs in Arkansas.

Sunday’s interview did not focus on health care reform, but Hutchinson has previously outlined several positions on the subject. He’s opposed to the Affordable Care Act, calling it a “job killer” that is “fatally flawed.” Hutchinson advocates continued Medicaid reform and includes the “taxpayer funded private option” as one of those components.
Hutchinson has called the private option “a pilot program.” He’s stopped short of calling for its cancellation, but he’s also not rallied for its continuance.

“The current private option is an innovative approach to expanding health care in Arkansas, but we must measure its effectiveness and costs,” Hutchinson says in his jobs plan. “If it is not affordable for Arkansas, or it does not accomplish our goals, then we will need to end or change the program.”

REGULATORY REFORM
While Hutchinson wants to expedite permitting processes for businesses needing regulatory approval as was noted earlier, he provided an example of a permit issued with too little public notice.

He said he supports efforts to protect Arkansas’ natural streams and has concerns about how a controversial large-scale hog farm permit was issued in north Arkansas near the Buffalo River. Hutchinson said he wouldn’t push to shut down the current hog farm operation that was approved in the area, but he wants to see the permitting process “tightened up” in the future.

“Obviously, it is a regulation that is important to protect our streams and our water quality that we value in our state. I grew up on the Spavinaw Creek drinking out of the stream,” he said. “But the farmers didn’t do anything wrong. The farmers went through the permit process, so don’t penalize the farmer. But first of all, my commitment is to protect the [Buffalo] river, and then secondly, you’ve got to make sure you tighten up the permitting process so that everyone has the notice – all the stakeholders, which they seemed not to have the last time, not adequate notice out there. So the farmers did absolutely nothing wrong. They followed the rules, so don’t penalize them. But let’s protect the Buffalo River and the quality of life that we so value in this state.”

Hutchinson said he planned to push back against “overreaching regulations from the federal level” saying there is a state role to play. Citing new EPA regulations regarding carbon emissions, He said he would organize industry and state regulators to coordinate public comment in opposition to the rules. When asked if organizing public comment would be adequate to halt implementation, Hutchinson said it should have some impact.

“I would like to think the administration is very sincere about inviting public comment. Why do you have public comments? It’s because you want to take those into consideration as to how you move forward,” he said.

However, Hutchinson also advocates a more aggressive state approach to federal regulatory policy.

“I think there is some question as to the legal authority for those regulations and the state should consider challenging those regulations. This is a different approach to a regulatory environment,” said Hutchinson.

On the state level, Hutchinson wants to start with a moratorium on new regulations.

“The second thing I would do is put in a moratorium immediately as I become Governor so that we would stop the new regulations coming into place without a cost-benefit analysis going into place,” he said.

Link here for the full video interview with Hutchinson.

Armed with $250 billion to spend on U.S. made products through 2023, Wal-Mart Stores is holding its first “Open Call” for suppliers on Tuesday (July 8). The day full of more than 500 meetings at Wal-Mart’s home office in Bentonville between prospective suppliers and Wal-Mart could mean more business for manufacturers in the Northwest Arkansas and Fort Smith areas.

Gov. Mike Beebe is scheduled to attend the opening session at 8:45 Tuesday morning along with Walmart U.S. CEO Bill Simon. The general session will set the tone for the event and several other informational sessions that will be held throughout the day for prospective suppliers.

“Monday’s educational series will include sessions on product compliance protocol, supplier diversity, labeling and knowing the Walmart customer,” said Kayla Whaling, Wal-Mart spokeswoman.

SELLING U.S. MADE
Cindi Marsiglio, vice president of U.S. sourcing and manufacturing for Walmart U.S., told The City Wire that two-thirds of the products already sold by Wal-Mart are made in America. Wal-Mart announced in early 2013 a plan to increase its purchase of American made products to $50 billion by 2023.

“We remain focused on expanding that by $250 billion in U.S. made products. We are doing that in three ways: working with current suppliers, working with current supplier who want to reshore some operations and finding more new U.S. suppliers,” Marsiglio said.

She said Wal-Mart has 150 projects in the pipeline now looking at reshoring operations. 

“There is no category we aren’t considering. We work as the facilitator between state economic development teams and businesses seeking onshoring opportunities. We are holding our second annual Manufacturing Summit in Denver August 14-15, between all the stakeholders — local and state government economic teams and suppliers,” Marsiglio said.

OPEN CALL
She said there are roughly 900 suppliers — not quite one half of those already do business with Wal-Mart — slated to meet with buyers at Tuesday’s first ever Open Call for U.S. products.

The Open Call meeting was announced earlier this year by Michelle Gloeckler, executive vice president of consumables and U.S. manufacturing at Walmart. One item she called to attention was patio furniture, saying the retailer is looking for U.S. made or assembled units to stock for next season to cut down on the shipping time and carbon footprint of the seasonal items.

Bill Simon, CEO of Walmart U.S., said the retailer is eager to see what new products may be presented at Open Call. He said coolers, textiles, televisions and even pink flamingo yard ornaments, once only made in China are now made in the U.S. and sold at Wal-Mart.

LOCAL PITCH
Hugh Jarratt, owner of Jarratt Industries in Fayetteville, will be among the prospective suppliers vying for shelf space at Wal-Mart Stores at Tuesday’s Open Call.

“I signed up through the Open Call submission form online. Around June 17 or 18  I got notified of a meeting with buyers at the July 8 Open Call,” Jarratt told The City Wire.

A lawyer by trade, Jarratt invented a taco plate about four and a half years ago and sold them at the War Eagle Craft fair. He slowly got the plates and two more products into retail stores, Amazon.com and specialty catalogs. Most recently his taco plate, double dip bowl and patio plates were picked up by Harp’s Food Stores. The products are manufactured in Prairie Grove by Polytech Molding.

“I thought about the design for a taco plate that would keep three tacos standing upright, with two other compartments for beans, rice or salsa. I went to Toys R Us and bought some Floam that I used to mold the shape I wanted,” Jarratt said.

Jarratt searched Google for injection molding manufacturers in Arkansas and Polytech Molding in nearby Praire Grove popped up.

“I worked with Polytech to develop the prototype and we added the bright colors a little later with the help of Mesa Industries in Fort Smith,” Jarratt said. “I added the double-dip bowl and patio or tailgate plates and secured collegiate licensing for personalization of teams for tailgaters.”

Working with a local manufacturer, Jarratt said he is able to get a very quick turnaround on orders and he keeps several thousand units in stock for wholesale reorders.

“I don’t think I could be in business without Polytech Molding. They handle my shipping and fulfillment since I am just a two-person corporation — my wife and I, who are both practicing attorneys,” Jarratt said.

In preparation for this meeting with Wal-Mart buyers on Tuesday, Jarratt said he has done his homework, pulling all his sales numbers and presenting his ideas for pricing and display methods.

“If this product is priced right and properly displayed, then it sells. I have the track record to prove it.”

The outlook for the pork sector has been tempered by the continued threat of PEDv, — Porcine Epidemic Diarrhea virus — which has affected more than 7 million pigs in 30 states over the past year. To date, Arkansas is one of the few agricultural states without a confirmed case.

There was an Arkansas case recently reported in error, but that was corrected in the national data base.

Analysts said the impact of the wide spread disease will likely be felt in late summer and and early fall as pork prices continue to rise. Profit margins for U.S. hog producers were at high levels in May and June as the threat of PEDv pushed hog prices to historic highs, aided by more favorable feed prices. (Link here for a PDF explainer from the U.S. Department of Agriculture about the virus.)

Hog producer margins averaged $65 per head in May and $73 per head in June. Margins are significantly higher than last year, when they were at break-even levels, according to a recent Rabobank report. Analysts expect 2014 margins to average $60 per head.

While there are fewer pigs going to market, the weights are up by about 10%. Tyson Foods, one of the largest pork processors in the U.S., said in May that it planned to reduce production more this summer as it copes with a drop in pig supplies as a result of PEDv. Tyson expects pork supplies to be down as much as 4.5% this year due to the deadly piglet virus.

CASE TRACKING
The American Association of Swine Veterinarians reported 105 new positive cases of PEDV last week out of 773 tests conducted at nine diagnostic centers across the U.S.

Iowa, a large swine production state has seen the biggest impact with more than 2,100 confirmed cases, nearly twice the number in the next most active state for PEDV — Minnesota has reported more than 1,230 cases since testing began in November 2013.

Last week the National Pork Board reviewed the most recent breeding numbers and said that despite active PEDv in many states, the breeding herd is relatively stable, with the March to May pig crop being closely watched, given the disease strikes piglets. The report indicates there are 26.371 million piglets in the U.S. being finished out. That number is down sharply from 2.979 million a year ago.

Farmers are working to lower the mortality rate with 9.78 pigs per litter saved in the March to May pig crop. The mortality rate is up 5% in the past year.

“We really saw profitability begin to pick up in (September) 2013,” noted Dr. Chris Hurt, professor at Purdue University. “We thought we’d see some expansion showing up, but this report says, no, that is not the case.”

He said the other surprise is in the March to May farrowings where there were expectations for up to 2% gains. Instead they were down fractionally. Hurt said warm months have reduced PEDv losses, but they aren’t under control yet.

The majority of cases have occurred in large commercial farms where animal concentration is dense. Several large grow-out farms for commercial processors have made the commitment to switch to modified housing options and as a result, their gestation barns hold fewer breeding animals.

Local suppliers like Mason Creek Farms, and others in the Boston Mountain Breeder Association said their pasture raised hog herds looks healthy and they continue to guard against the virus being tracked onto their farms from officials who visit larger commercial operations.

FEDERAL AID
On June 5 the U.S. Department of Agriculture announced $26.2 million in funding to combat the diseases wreaking havoc on the U.S. pork industry. USDA issued a federal order requiring the reporting of new detections of these viruses to its Animal and Plant Health Inspection Service (APHIS) or State animal health officials.

"In the last year, industry has estimated PEDv has killed some 7 million piglets and caused tremendous hardship for many American pork producers," said Agriculture Secretary Vilsack. "The number of market-ready hogs this summer could fall by more than 10% relative to 2013 because of PEDv. Together with industry and our state partners, the steps we will take through the federal order will strengthen the response to PEDv and these other viruses and help us lessen the impact to producers, which ultimately benefit the consumers who have seen store pork prices rise by almost 10% in the past year."

The $26.2 million will be used for a variety of activities to support producers and combat these diseases, including:
• $3.9 million to support the development of vaccines
• $2.4 million to support management and control activities
• $500,000 to herd veterinarians on monitoring of herd management plans and sample collection
• $11.1 million in cost-share funding for producers of infected herds for biosecurity practices.
• $2.4 million for diagnostic testing
• $1.5 million for genomic sequencing for newly positive herds