There were few fireworks in the Lt. Governor and Attorney General debates at the Arkansas Press Association in Hot Springs on Friday.

U.S. Rep. Tim Griffin, the Republican nominee for Lt. Governor, did manage to turn a talking point for Democrat John Burkhalter to his advantage.

Nate Steel, the Democratic nominee for Attorney General, spelled out specifics for a legislative package he would undertake, while Republican Leslie Rutledge said she wasn’t against a package of bills, but would adopt a different approach to working with lawmakers.

LT. GOVERNOR
Griffin, who left the debate near the halfway mark to cast votes on the floor of Congress, participated in the APA forum via Skype. He said he wanted to focus on jobs and workforce issues. Griffin added that his background in Congress, politics, small business and the military made him the best candidate for the Lt. Governor’s post.

“I have a varied background that has prepared me well to do that,” Griffin said.

Democratic challenger John Burkhalter touted his lack of government and political experience as an advantage. Burkhalter, a businessman and former AEDC and Highway commissioner, also said he would push for job opportunities and workforce reform if elected. He said more emphasis on non-college bound worker education, such as “votech” or “shop” training, was once out of style but was critical to economic progress.

“Folks, it’s always been in vogue with me,” he said.

Burkhalter also took a shot at drawing a distinction between himself and Griffin, saying there was a difference between a “career politician” and someone who has been “building businesses” for 30 years.

Griffin fired back, “I’ve been in office for four years, so it sounds like my opponent is attacking the Democratic nominee for Governor. If he’s talking about a career politician, he’s not talking about me. He must be talking about Mike Ross.”

Democratic gubernatorial nominee Mike Ross, a former Congressman and State Senator, has endorsed Burkhalter and the two men are running as a ticket.

Christopher Olson, the Libertarian nominee for Lt. Governor, also shared the stage. He said with the troubles of former Lt. Governor Mark Darr, he would advocate for shrinking the office’s roughly $400,000 annual budget and would push to abolish the office.

“$400,000 is too much to spend on what is essentially a part-time job,” Olson said.  He added that he thought the duties of the Lt. Governor’s office could be handled by other constitutional offices.

While he played up his “everyman” roots, Olson also answered a question about whether he would be the best person for the Lt. Governor’s post.

“I would imagine there are better qualified persons to hold that office,” he said.

ATTORNEY GENERAL
The three Attorney General candidates debated following the Lt. Governor’s forum.

Nate Steel, the Democratic nominee, played up his opposition to Act 570, a sentencing reform measure that many blame for parole problems that have now led to prison overcrowding. He also noted he co-sponsored a law that provided for non-partisan prosecuting attorney elections.

Steel said his first act as Attorney General would be to initiate a “comprehensive criminal justice review” in order to revise various aspects of the system. The former prosecutor also said he would bring a package of reforms to the state Legislature to deal with prison and sentencing solutions, limit outside counsel for the AG’s office, and expand the role of the position’s cybercrimes unit.

“We need an AG whose ready on day one,” Steel said.

Rutledge, who survived a brutal primary and run-off election, said she was hesitant to bring a legislative package in January, if elected.

“It’s not my intention to have a legislative package, but I’m not ruling it out,” Rutledge said. “I believe the AG’s role is to help the legislature write good, clean laws.”

Rutledge, who served as legal counsel to Gov. Mike Huckabee and has been a deputy prosecutor, played up her previous statements that she would use the Attorney General’s profile and power to fight federal overreach. Citing EPA rules and the Affordable Care Act, Rutledge said she would stand up to the federal government and join other state’s attorneys general in lawsuits to challenge rules, regulations and laws that may harm Arkansans.

“We have a crisis in America with an overreaching federal government,” she said. Rutledge combatted criticism that she would challenge everything.

“I’m talking about doing it when necessary, not just on a whim,” said Rutledge. “We’re going to go after the federal government when necessary.”

Aaron Cash, the Libertarian nominee, said the Attorney General was “not a lawmaker” and has “nothing to do with sentencing.”

Cash characterized efforts to get involved in federal overreach issues as a “waste of time” and said there are “other more important issues to focus on here at home.”

With four gubernatorial candidates on stage at a Hot Springs debate held by the Arkansas Press Association, Mike Ross and Asa Hutchinson took plenty of shots at each other.

Joshua Drake (G), Frank Gilbert (L), Asa Hutchinson (R), and Mike Ross (D) fielded questions on same-sex marriage, the Private Option, prison overcrowding, the lottery, and environmental concerns.

Ross, the Democratic nominee, came out quickly on the attack, using the very first question asked about his position on same-sex marriage to challenge Hutchinson’s positions on the minimum wage, tax reform, and health care.

While he shared the same position of opposing same-sex marriage, Ross said Hutchinson’s tax cut plan leaves out relief for those making less than $20,000 annually. He also said that Hutchinson opposed raising the state minimum wage.

Hutchinson countered that his tax plan offered plenty of relief for low-income Arkansans, but more importantly, he said middle-income taxpayers deserved more help.  He also said he was an advocate for raising the minimum wage, just not through the ballot process.

A measure to raise the state minimum wage to $8.50 an hour over the next three years is likely to qualify for the November ballot. Ross supports the initiative, while Hutchinson said he wants the state legislature to control changes to the wage law. Hutchinson also said that he supported raising the state minimum wage to match the federal minimum wage.

The two major party candidates exchanged volleys on the Private Option, Arkansas’ bipartisan Medicaid expansion crafted to offer health insurance to low income workers.
While noting it has been good for rural hospitals, Hutchinson repeated his previous concerns about monitoring the cost impact to the state and said he wanted to make sure the insurance was reaching the right citizens.

He also took after Mike Ross’ record surrounding the federal Affordable Care Act, which led to the state Private Option’s creation.

“When you look at Mike Ross on the Affordable Care Act, he finds himself on both sides of an issue,” Hutchinson said. “We have a candidate here who is on both sides of an issue.”

Ross defended his votes in Congress, noting that he opposed the final Obamacare measure that became law and voted to repeal it. He said the Private Option Medicaid expansion was a good part of health care reform.

“We’re giving it (the Private Option) to the right people – it’s the right thing to do,” he said. “As governor, I’ll protect the funding for the Medicaid Private Option.”

Known as the “Oscars of Innovation,” the list of the world’s top 100 technological product innovations compiled by R&D Magazine is prestigious, and the new list includes a Fayetteville-based firm.

For the second time in the company’s short history, Arkansas Power Electronics International, Inc. has been included on the list, which in the past has included such cutting-edge technologies as the flashcube, the automated teller machine, the fax machine and high-definition television.

Founded in 1999, APEI – the largest company affiliated with the University of Arkansas at the Arkansas Research and Technology Park – specializes in advanced, high-performance electronics for a variety of customers and applications, including the defense, aerospace and hybrid/electric vehicle markets. The magazine based its latest R&D 100 award on APEI’s high-performance, silicon carbide-based plug-in hybrid electric vehicle battery charger.

At the core of the on-board charger unit is one of APEI’s power modules, which will be released as a standard product later this year. The module’s high-speed switching capability and high-temperature packaging enabled the company to create a battery charger that is more efficient and more powerful than the current commercial technology.

The battery charger represents a major advance in power electronics and meets the increasing demands of the plug-in hybrid electric vehicle and electric vehicle markets and plays a vital role in allowing these markets to experience continual growth.

The new technology developed at APEI can also be utilized across a wide variety of different applications outside of the electric vehicle markets. These include: renewable energy battery charging, distributed grid storage, material handling equipment, boats, handicap mobility vehicles, commercial hybrid vehicles and future military tactical vehicles and systems.

APEI led the development of the battery charger in a collaborative research partnership that includes four other entities – Toyota Motor Engineering & Manufacturing North America, Inc.; the National Center for Reliable Electric Power Transmission, an academic research center based at the University of Arkansas; Oak Ridge National Laboratory; and Cree, Inc. The collaboration is funded by the Advanced Research Projects Agency in the U.S. Department of Energy.

In 2009, APEI received its first R&D 100 award for a high-temperature silicon carbide power module that was the result of a collaboration with the University of Arkansas and Rohm Co. Ltd. The module can greatly reduce the size and volume of power electronic systems.

Paul Harvel’s more than 46 years of work with chambers of commerce in three states –  from Northwest Arkansas and Fort Smith to Amarillo – has garnered him the most prestigious award in U.S. chamber circles.

The American Chamber of Commerce Executives (ACCE) has announced that Harvel will receive the Life Member Award, the chamber of commerce profession’s highest individual honor. It is bestowed in recognition of a lifetime of business community leadership and service to the association and chamber of commerce profession. The award will be presented to Harvel during ACCE’s national convention, to be held this year in Cincinnati, Aug. 12-15.

Only 42 individuals in the ACCE’s 100-year history have received the award.

“This is pretty neat. It’s the 100 year celebration, and they’ve only given out 42 before this year. ... And I have to tell you I was also pleased that it happened on the first ballot,” Harvel told The City Wire.

Harvel also was quick to deflect praise for the award – an action typical for those who know him.

“I really don’t know why they reached down to me for this. I guess I hung in there longer than they thought I would,” Harvel joked.

Recipients of the Life Member Award are nominated by their peers and selected by the association’s board of directors. Harvel is one of only three Life Member Award honorees in 2014. The Life Member award is earned by those who retire after notable careers in chamber leadership, and are awarded to those who exhibit a “tireless commitment to the profession and their peers, while driving positive change in their organizations and communities,” according to ACCE.

“It is especially poignant to be honoring Paul‘s work and his enduring influence across the nation during this, our centennial year, considering how instrumental he was in the success of ACCE for much of its history,” Mick Fleming, ACCE president, said in a statement.

The other 2014 Life Member honorees are James Anderson who is retiring as the Springfield, Mo., chamber president after 26 years; and Richard Hadley, who served 21 years as head of Spokane, Wash., chamber and economic development group.

HARVELCHAMBER HISTORY
Harvel began his chamber career in 1967 with the Little Rock Regional Chamber of Commerce. One of his highlights there included being part of a group that created Pulaski County Technical College, which now has an enrollment of 12,000, four regional locations and a new culinary school.

He left Little Rock after six years to be CEO of the El Dorado Chamber of Commerce. Other chamber jobs included head of the chambers in Enid, Okla., and Midland and Amarillo, Texas.

In 1985 he returned to Little Rock as the chamber CEO.

“The Little Rock Chamber’s total assets rose from $70,000 to over $10 million during his 21-year tenure. He conceptualized and built the Little Rock Regional Chamber’s new home and economic development center. The $8.5 million building was completed in 2001 and paid for in 3-1/2 years. It stands today as one of the nation’s premier chamber and marketing facilities,” noted the ACCE statement.

Following the Little Rock Chamber, Harvel became president and CEO of the Arkansas State Chamber where he started Leadership Arkansas and in two years saw total income rise from $800,000 to $1.8 million and membership grow from 650 to 1,400.

Harvel was also appointed by Gov. Mike Beebe as a member of the Arkansas Economic Development Commission.

Harvel closed his chamber career in 2013 at the Fort Smith Regional Chamber of Commerce. In Fort Smith, he was instrumental in securing more than $2 million for a new economic development fund drive.

‘CONTAGIOUS OPTIMISM’
Sam Sicard, president of First National Bank of Fort Smith, was part of the group that brought Harvel to Fort Smith.

“I am extremely pleased Paul Harvel is being appropriately recognized for the tremendous contribution he has made to our state and country for decades. Paul is a true visionary and his contagious optimism gave communities around this state the opportunity to accomplish far more than what many believed possible,” Sicard said.

Craig Rivaldo, former head of Arvest Bank in the Fort Smith area and now head of Arvest Bank in Benton County, worked close with Harvel on the economic development fund drive.

"I have never seen someone who could get in doors and raise money to the extent that Paul could. I believe that is a product of the respect many people have for Paul based on his many years in the chamber business,” Rivaldo said.

Perry Webb, president and CEO of the Springdale Chamber of Commerce, said Harvel has been a mentor to him and many other chamber officers around the country. Webb entered chamber work in 1987, and said Harvel has always been there to help or provide guidance. Webb also praised Harvel for his many years of support of the Arkansas Chamber of Commerce Executives Association.

“For many years, he supported that out of his (Little Rock chamber) office at no charge to the rest of us,” Webb explained.

Harvel has recently worked with Webb to raise money for the chamber’s strategic initiative fund. Webb said Harvel has called on more than 200 companies to help gather commitments for more than $1.4 million.

“He absolutely deserves it. It is a great honor for him,” Webb said of the ACCE award.

LEADERSHIP PUSH
Leadership programs were a large part of his chamber career, starting Leadership Enid, Leadership Little Rock in 1985, one of the first programs in the state, and Leadership Arkansas in 2006.

Mike Callan, president of Fort Smith-based Arkansas Oklahoma Gas Corp., was in the first Leadership Arkansas class formed by Harvel and was asked by Harvel to chair the second year of the class. Callan, who is in his final year as board chairman of the Arkansas State Chamber of Commerce, said Harvel’s award is not a surprise.

“Paul Harvel has dedicated his whole life to chamber work and community work. I can’t think of anyone else who is more deserving than Paul Harvel. ... I was really excited when I learned this morning that it came through for him,” Callan said.

Harvel how works part-time for Arkansas gubernatorial candidate Mike Ross, a Democrat.

After more than four decades in public education and administration, Van Buren Superintendent of Schools Dr. Merle Dickerson hung up his proverbial educator's hat last month and headed off into the world of retirement.

"My decision was made in April. I have an old friend, who is also retiring this year, who has told me that you will know when it’s time to retire. I always thought that would be good to know," joked Dickerson. "In April of this year, I just felt the need to move on to something else ... another chapter in our lives. It just felt that that it was my time."

Dickerson spent the past 13 years as head of VBSD, coming to the district in 2001. Prior to his role at Van Buren, he served 14 years as a band director, three years as a counselor, nine years as a principal, and four years as superintendent at other Districts throughout the state.

During his district tenure, the school and community experienced significant change and growth. From building projects to grade restructuring, Dickerson helped navigate VBSD through each step, rounding out his long-career with a great sense of accomplishment and many fond memories.

ACHIEVEMENTS AND RECONFIGURATION
Always with an eye on the classroom, Dickerson believes one of district's greatest successes has been its commitment to hiring and developing educators.

"Our efforts in the classroom, in building successful students and challenging teachers to become better themselves, is something that is derived from research that has convinced us that the most important school related influence on the child was based on the quality of the teacher," said Dickerson. "We’ve challenged our teachers to challenge themselves so our kids could learn more and better from great teaching by great teachers."

As part of its plan to best equip its teachers and to ease some of the often difficult transitions for students between schools, the district opted to restructure its grade levels beginning in the 2012-2013 school year. Dickerson believes the move was a great step forward for the District.

"Perhaps our best move was the reconfiguration of the grades," said Dickerson. "Over the course of two years of study, we recommended a change in reconfiguration that would assure our students fewer transitions from one school building to another. We were able to make that shift with the help all our teachers and staff as well as a very connected group of parents who determined that if it was the right thing to do for our kids, we had to figure out a way to make that change."

The process included the move of grade five to elementary schools, making them K-5 buildings. The former Central Middle School was changed to an elementary campus, while the Northridge Middle School, which previously housed grades 5-6, and Butterfield Junior High School, were converted to 6-8 grade buildings. The former Coleman Junior High School was made an extension of the Van Buren High School campus, becoming home to all 9th graders and being renamed the Coleman Freshman Academy. Grades 10-12 remain on the VBHS campus.

FACILITY IMPROVEMENTS
Perhaps the most notable change over the past decade, aside from the grade reconfiguration, has been the number of facility upgrades. The district made renovations and additions at several campuses, including the expansion of Van Buren High School and the construction of a new basketball arena and Fine Arts Center. Several FEMA-standard storm shelters were also added to a number of campuses.

The district also demolished and rebuilt King Elementary School, using primarily environmentally-conscience technologies. Since opening, the building has been awarded several "green" honors, including being named the first Gold certified LEED for Schools project in Arkansas by the U.S. Green Building Council.

"I have been very proud of our facilities progress in the last 13 years," Dickerson said. "Our community has been able to make significant strides in providing funding for facilities space. All of our schools have been upgraded to some extent in the past 12 years with our most significant work at Van Buren High School, Butterfield, the Freshman Academy, King Elementary School – and all the remaining buildings have had some additional space added or upgraded in some fashion."

Renovations were also completed at the district's Blakemore Field, as well a complete relocation of VBSD's Transportation, Child Nutrition, and Maintenance operations to facilities located in Industrial Park.

"The facility changes have made a big difference in our community," said Dickerson. "I’m so proud of Van Buren for supporting our kids in that fashion."

CHALLENGES AND OPPORTUNITIES
Despite the constant changes and obstacles today's schools face, Dickerson believes the future holds great promise for students and teachers.

"I think the future is an 'open door' for educators," said Dickerson. “I expect many things to change in this world and every change will have an effect on our schools. I expect we will see more opportunities for our kids, more decisions for our parents, more opportunities for parents to decide on what their children need, etc.”

Dickerson acknowledges that said "opportunities" may well extend beyond the traditional brick and mortar public school building.

"All we have to do is look around and see all the options children and parents have in the world of technology — many states now offer children online schooling. The old days of 'a school in every town' are gone. Now our kids have opportunities to graduate early, get specialized training, and go to work," explained Dickerson. "These opportunities should not threaten public schools. But public schools must consider the needs of our children ‘first’ in planning for the next five to ten years. The traditional public school will not be the only option for parents and students — our job should be to deliver to our kids and parents what they want and need in schooling."

COMMUNITY INVOLVEMENT, IMPACT
As with any community, the role schools play in the development and success of an area is undeniable. Dickerson understood this as Superintendent by serving on boards and working with other entities to help move the city forward.

"As a community leader, Dr. Dickerson understood the important role that a school district has in driving economic development," said Jackie Krutsch, executive director of the Van Buren Chamber of Commerce. "Great performing schools  lead to growing communities. People move to a community that puts children first, that is cutting edge, and creative in meeting the needs of all of their students. Dr. Dickerson served as a member of the Van Buren Chamber Board of Directors and was engaged in dialogue with the business community."

Dickerson also worked closely with chamber and city officials to help prepare students from a young age to think ahead in terms of college and employment.

"He understood that business leaders need great students to become great employees,” added Krutsch. "He also understood that the business community's interaction with students could have a tremendous impact on their future. He championed the Arkansas Scholars Program that has continued to grow with more and more students completing all of the requirements of that four-year program.”

RETIREMENT PLAN
As far as his plans for retirement, Dickerson is simply looking forward to the next chapter for he and his wife, Paula.
"You just come to 'know' it is time to make a change. We will take some time to rest and I think we’ll find our niche in the next season of our lives."

Upon reflection, Dickerson can rattle off a long list of fond memories he has from his 40-plus years in education, from those of his own children attending school to witnessing the simple joy of watching kids succeed in a class or on an assignment.

"I have memories of my own students on trips and teachers walking out of school at the end of the day tired, yet smiling that smile that tells me that had a good day with their kids. The fond memories don’t have to be monumental occasions — they can be a hug and thanks from a student, an invitation to see what they’re doing, and just the knowledge that we’re doing our best for our kids. I have 41 years of those special memories and they will be a blessing to Paula and I as we consider our next adventure."

As Arkansas regulators contemplate how to cut carbon emissions from the state’s fleet of coal-fired power plants, reducing the state’s dependence on its cheapest and most plentiful source of power could turn out to be a monumental and very expensive task.

In the days following President Barack Obama’s executive order mandating a 30 percent reduction in carbon dioxide emissions from electric generating plants by 2030, many supporters and critics have weighed in on the task ahead and, of course, the costs.

Arkansas Electric Cooperative Corp. (AECC), which oversees Arkansas’ 17 electric distribution cooperatives, said it was concerned how the Environmental Protection Agency’s proposal will impact future rates and the reliability of Arkansas’ electric generating capacity.

“We are disappointed that this EPA rule will reduce our use of coal, which is our most economical and reliable fuel to generate electricity,” AECC President & CEO Duane Highley said. “Although the proposed rule leaves the precise implementation details to the states to develop, the inevitable result will be the use of more expensive fuels, such as natural gas.”

Others critics from the business community and the state’s congressional delegation also echoed Highley’s concerns. Many have cited a study by the U.S. Chamber of Commerce’s Institute for 21st Century Energy, which issued a 71-page report saying the EPA’s plans to regulate carbon dioxide emissions from power plants will cost America’s economy more than $50 billion a year between now and 2030.

“Americans deserve to have an accurate picture of the costs and benefits associated with the administration’s plans to reduce carbon dioxide emissions through unprecedented and aggressive EPA regulations,” Energy Institute President & CEO Karen Harbert said. “Our analysis shows that Americans will pay significantly more for electricity, see slower economic growth and fewer jobs, and have less disposable income, while a slight reduction in carbon emissions will be overwhelmed by global increases.”

EPA SUPPORTERS
On the opposite end of the spectrum, dollars signs were also on the mind of the Sierra Club of Arkansas. But instead of additional costs to Arkansas consumers, Glen Hooks, director of the Arkansas chapter of the environmental group, said carbon pollution causes climate disruption and is already costing American communities billions of dollars from flooding, wildfires and extreme heat.

“By cleaning up and modernizing our aging, dirty power plants, we will begin to clean up our air, cut pollution-related illness and curb the worst effects of climate disruption,” Hooks said of Arkansas’ coal-fired power generation. “Curbing dangerous carbon pollution from power plants will not only save billions of dollars, it will also save lives.”

Notwithstanding the difference in opinions about the costs associated with the EPA’s proposal, all of the stakeholders say the process of developing a new power generation plan for Arkansas will be difficult and complex. Like the federal Affordable Care Act, known widely as Obamacare, President Obama’s new EPA standard allows regulators and stakeholders to design and implement a plan for its retail power marketplace that fits the need of Arkansas’ residential, commercial and industrial electric consumers.

According to the latest EIA statistics, as of Feb. 14, Arkansas ranked 29th among the 50 states in the amount of total carbon dioxide or “dirty air” emissions with 67 million metric tons. By comparison, Texas is ranked first with 656 metric tons of carbon emissions, while Vermont and the District of Columbia have the lowest emissions at 3 and 6 million metric tons.

The Arkansas Department of Environmental Quality (ADEQ) and the state Public Service Commission (PSC) have already begun stakeholder discussions intended to create an Arkansas plan pursuant to the new standard.

In an interview with Talk Business & Politics, ADEQ Director Teresa Marks said her department and the PSC have their work cut out for them. Although she was pleased that state regulators will have the flexibility to adapt a plan that is going to fit the needs of Arkansans, the state environmental chief said her department has the unenviable task of briefing stakeholders about the controversial guidelines.

“I think we have a lot of work ahead of us to determine what options or combinations of options will work best here in Arkansas,” Marks said of the 645-page proposal. “We will be pouring through it over the next several weeks.”

STATE’S LAST EFFORTS POWERED OUT
The state’s last attempt to restructure Arkansas’ electric power marketplace ended spectacularly in February 2003, when House Bill 1413 was signed by then-Gov. Mike Huckabee in order to repeal earlier enacted deregulation legislation. The Arkansas General Assembly passed Act 204 and determined that it was in the public’s best interest to continue regulating electric utility rates for the foreseeable future.

Those actions by Huckabee and state lawmakers in the winter of 2003 essentially killed the much-lauded Electric Consumers Act of 1999, which mandated in the retail sale of electricity beginning as early as Jan. 1, 2002.

The original act was intended to restructure the electric power industry and allow retail access by January 2002. Stranded costs were to be recovered via a competitive transition charge and the sale of bonds. Rates were to be frozen for three years for utilities seeking stranded cost recovery and one year for those that did not.

In addition, the PSC was empowered to force divestiture of generation assets to alleviate market power, and it was allowed to decide if stockholders should share stranded cost recovery with ratepayers. Utilities were required to functionally unbundle generation, transmission, distribution and customer service and file unbundled rates with the PSC by Jan. 1, 2000.

But most of those initiatives never got off the ground. In October 2000, the PSC opened a docket to study the electric power market. It wanted to ensure that the power supply problems and price spikes that occurred in California in the summer of 2000 did not occur in Arkansas when restructuring was scheduled to begin in 2002.

But Entergy and other state utilities suggested delaying the start for competition until Oct. 1, 2003, or Oct. 1, 2005, at the latest. Prevailing legislation required the retail market to open by June 30, 2003, at the latest. The PSC, utilities and the state attorney general’s office all agreed that the original timetable was unlikely to be carried out, but disagreed on when competition would begin. The PSC was directed to present its recommendation to the legislature in mid-November 2000.

On Nov. 29, 2000, the PSC issued the much-awaited “Report on Electric Restructuring” to the Arkansas General Assembly. State regulators recommended the date for deregulation be extended from the original timeframe in the restructuring legislation of Jan. 1, 2002, through June 30, 2003, to Oct. 1, 2003, through Oct. 1, 2005.

In the next legislative session in 2001, the Arkansas General Assembly approved Senate Bill 236, which was signed into law as Act 324. The new act delayed the start of deregulation from January 2002 to October 2003. The PSC was also authorized to initiate further delays based on the adequacy of the state’s transmission system and generating capacity to support a competitive market.

In December 2001, the PSC submitted another report to the General Assembly pursuant to Act 324, assessing the progress of restructuring in the Arkansas electric industry. The PSC recommended that the General Assembly either completely suspend the current statute to some future date or repeal the laws related to retail open access.

The recommendations were based on the prevailing absence of an operating regional transmission organization and the lack of evidence that customers, especially residential and small commercial customers, would realize a net price benefit from retail open access.

In comments from the PSC staff, it was also stated that in order for competition to exist, improvements to the transmission system were needed to assure that the major load centers in Arkansas have equal and reasonably unconstrained access to generation supplies.

By the time the 2003 General Assembly rolled around, Arkansas lawmakers had spent nearly two years reading headlines about the California energy crisis and how Enron Corp. had gamed consumers for billions of dollars in that state’s deregulated marketplace. Once the session began, the death of deregulation was inevitable.

One of the interesting bullet points that came out of the PSC’s staff recommendations to postpone the state restructuring efforts was that there was no “federal push” for competition in the nation’s electric retail market, especially after the California energy crisis caused massive blackouts, electric supply shortages and historic spikes in wholesale power prices.

At the time, the Federal Energy Regulatory Commission was charged with overseeing the final rules regarding the restructuring of the nation’s electric industry. Now, more than 11 years later, the Obama administration has essentially picked up the ball and restarted those efforts at the statewide level through the president’s favorite and most active government agency – the EPA.

But not much has changed over the last decade since the state’s deregulation efforts were stalled. Arkansas’ electricity profile is essentially the same.

For instance, four of the five largest power plants in Arkansas are still operated by Entergy Arkansas. The natural gas-powered Union Power Station in El Dorado, owned by the Tampa, Fla.-based Entegra Power Group, is the state’s largest power plant with a net generating capacity of 2,200 megawatts, according to the U.S. Energy Information Administration (EIA).

But next on the list is Entergy’s Arkansas Nuclear One plant in Russellville, the coal-fired White Bluff and Independence facilities in Redfield and Newark, respectively, and the recently retired Robert E. Ritchie gas-powered plant in Helena.

In addition, the top providers of electricity in Arkansas are still the same as a decade ago. Entergy Arkansas is by far the largest electric retailer in the state with more than 700,000 customers in 63 counties across the state. Southwestern Electric Power Co. is second with just over 114,000 electricity users in Arkansas, with Mississippi County Electric Cooperative, Oklahoma Gas and Electric and First Electric Coop Corp. rounding out the top five.

CHEAP, PLENTIFUL COAL STILL KING
Once regulators and stakeholders come to the table to implement Arkansas’ new EPA-mandated electricity standards, the obvious “elephant in the room” will be any discussion on the topic of coal. If the EPA regulations drastically reduce the usage of coal, the reliability of Arkansas’ energy grid system will be at risk, said Sandy Hochstetter Byrd, vice president of member and public relations for the AECC.

Byrd should know. She is the former chairman of the PSC who played a central role in recommending that the state delay deregulation of the electric industry more than a decade ago.

“Coal is the lowest cost source for energy for our members and that is obviously a concern to us,” Byrd said. “For many years, coal has been our workhorse.”
In fact, Arkansas’ history with coal goes back more than a century. Coal was Arkansas’ first mineral used for fuel output, primarily for powering steam engines and heating homes and businesses between 1880 and 1920. Over the last century, however, oil and oil byproducts have pushed aside the popularity of coal as a fuel, and the mining of coal is minimal in Arkansas.”

However, coal is still king when it comes to generating electric power in Arkansas. And it is cheap. Between 1990 and 2012, the price of coal has ranged between $1.42 and $2.22 per million BTU (British Thermal Units), according to the EIA. By comparison, natural gas peaked in 2008 at $8.90 per million BTU. However, prices in 2012 fell to their lowest at $3.12 per million BTU, and closed on June 6 at $4.54 per million BTU on the New York Mercantile Exchange.

But even with the EPA’s pressure on coal-fired generation and cheaply produced natural gas from the nation’s numerous shale plays, coal is still the largest single fuel for electricity generation in Arkansas.

In fact, coal’s monthly share of total generation in Arkansas has fallen below 40% only three times over the past 35 years, EIA statistics show. In November and December of 2012, coal’s percentage of monthly electricity dropped below 40% for the first time in 35 years. Before that, the last time coal’s share of total generation fell below 40% for a monthly total was March 1978, the EIA’s Electric Power Monthly report shows.

Today, coal-fired power represents 44.5% of Arkansas’ annual net electric generation. Natural gas-fired generation is second at 23.2% and nuclear energy is next at 19.4%. Renewable energy generates about 6.4% of the state’s power needs and hydroelectric fills 5.4% of the state’s electric capacity. Petroleum-fired fuel, once a staple for heating oil, now generates less than 1% of the state’s power (0.6%).

Nationwide, coal has been the largest source of electricity generation in the United States for more than 60 years. However, its annual share of total net generation declined from nearly 50% in 2007 to 39% in 2013 as some power producers switched to more competitively priced natural gas.

GUIDELINES OPEN OTHER DOORS
Once Arkansas begins developing a new strategy to meet the EPA’s four-pronged guidelines, Entergy officials hope that the state’s largest utility will get credit for its nuclear plant operation in Russellville. Nationwide, New Orleans-based Entergy Corp. has voluntarily cut its carbon emissions across the utility giant’s system by shifting from older coal-fired plants to newer natural gas plants, and by expanding its national fleet of nuclear reactors to 12 power plants in eight states that produce nearly 90 million megawatt hours of generation.

If Entergy gets recognition for its nuclear powered generation, the utility giant will be well ahead of the EPA’s carbon cutting goals in Arkansas and across its operating footprint, said Chuck Barlow, vice president of environmental policy and strategy for Entergy.

“(The EPA) has got to give us credit for our nuclear megawatts,” Barlow said of the Nuclear I and II power plants in Russellville. “We use coal, but we also [produce] a lot of nuclear and it has zero carbon emissions.”

Meanwhile, environmental advocates and energy efficiency supporters also say the new EPA standards also should open the door for ramping up the use of renewable energy in Arkansas, including wind, solar, biomass and other low-carbon sources of power.

The Sierra Club’s Hooks said Arkansas power plants released nearly 41 million metric tons of carbon pollution in 2013 – with nearly 85% of that coming from just five coal-fired power plants. Three of these older plants (Entergy’s White Bluff and Independence plants, and SWEPCO’s Flint Creek plant) were constructed in the late 1970s and early 1980s, he said.

“Reducing carbon pollution is good for both our environmental and public health, plus it will create thousands of clean energy and energy efficiency-related jobs right here in Arkansas,” the Sierra Club spokesman said. “We look forward to working closely with utilities and regulators to help clean up Arkansas’ carbon emissions.”

Arkansas has adopted several policies to encourage energy efficiency and renewable energy. For example, the Sustainable Energy-Efficient Buildings Program was enacted in 2009, directing the Arkansas Energy Office to develop a plan for reducing energy use in all existing state-owned major facilities by 20 percent from 2008 levels by 2014 and 30 percent by 2017.

Also in 2009, the Arkansas Alternative Energy Commission was created to study the needs and impacts of various forms of alternative energy on the economic future of Arkansas. More recently, the PSC announced a Sustainable Energy Resource Action Plan requiring implementation of energy-efficiency measures by the state’s investor-owned utilities.

Democratic gubernatorial candidate Mike Ross, a former Congress from Prescott, released a plan Tuesday that he said would boost funding by at least $8.5 million to reduce crime, relieve prison overcrowding and address domestic violence and child abuse in the Natural State.

“One of government’s most fundamental responsibilities is to ensure public safety. My ‘Tougher, Smarter’ plan will reduce crime in Arkansas by toughening sentences for repeat and violent offenders; getting smarter about how we sentence certain first-time, nonviolent and drug offenders; cracking down on those who abuse children; and, enacting historic measures to protect and empower survivors of domestic violence," Ross said.

Republican gubernatorial challenger Asa Hutchinson responded Tuesday by saying he was out first with a plan and that his approach includes his years in law enforcement.

"My crime reduction plan was announced nearly month ago, which included more tools and resources for prosecutors; strengthening our parole system with additional parole officers with more authority; funding effective reentry programs and providing additional support for drug treatment courts,” Hutchinson said in a statement. “I am encouraged that Mike Ross has followed my lead and offered support for many of the same points in my plan. The clear difference is experience and leadership. I bring to this challenge my experience in law enforcement and as a former federal prosecutor."

Ross said a key factor in getting his plan enacted would be using his "experience of bringing people together to push partisan politics aside and find commonsense solutions that make our communities safer and more prosperous.”

The plan to toughen sentences focuses on repeat and violent offenders, as well as "enhancing sentences" for firearm thefts and aggravated residential burglary.
"The plan also directs the state to better utilize pre-sentencing assessments that identify effective and proven sentences to reduce the likelihood a criminal will re-offend," a press release from the Ross campaign said.

Ross' plan calls for increased funding of $8.5 million during the next four years to hire additional probation and parole officers, which he said would help the state "better utilize alternative sentencing, such as electronic monitoring and drug courts, and re-entry programs," which he said have proven to reduce crime and prison overcrowding.

“Currently, there are more than 2,000 state prisoners backed up in county jails, and law enforcement has expressed to me their concerns about the state’s ability to lock up those who break the law, especially violent criminals,” Ross said. “In addition to tougher sentences for repeat and violent offenders, my plan will help us get smarter about how we sentence and rehabilitate certain first-time, nonviolent and drug offenders, so that we can reduce the likelihood these criminals will re-offend and we can ensure our prisons have the space necessary to lock up violent and dangerous criminals and keep them off the streets.”

The plan also touches on domestic violence and child abuse, with Ross proposing the "Protecting & Empowering Survivors of Domestic Violence Act," which his campaign described as "a series of new measures to help survivors of domestic violence."

As a part of his proposed legislation dealing with domestic violence, Ross has proposed increasing funding for the Domestic Peace Fund that supports battered women's shelters across the state. To do this, he proposes requiring those convicted of domestic violence pay a court fee for each conviction of domestic violence offenses.

"(Ross) will also authorize portions of the Fund to support projects and programs that better train law enforcement to handle domestic violence situations," a campaign release said.

“Domestic violence is a major public safety issue in Arkansas and across America, which is why I proudly voted for the Violence Against Women Act and fought off attempts to weaken the law. It’s also why domestic violence is a cornerstone of my crime reduction plan,” said Ross. “We need to send a strong, clear signal in this state that domestic violence will not be tolerated, and we will do everything we can to protect and empower victims of domestic violence in Arkansas.”

The Arkansas State Police Crimes Against Children Division — the division tasked with investigating sexual abuse — would also receive $1.28 million under Ross' plan, with the campaign noting the division has not been able to add hotline operators or investigators since 2008 despite the rise in abuse reports.

“Every child deserves the opportunity to live a happy, healthy life.  As governor, I will increase funding for the Arkansas State Police Crimes Against Children Division so that we can crack down on those who hurt children and put them behind bars where they belong," Ross said.

Ross, whose gubernatorial candidacy has been endorsed by 65 of the state's 75 county sheriffs, said his latest policy proposal dealing with crime and domestic violence fit perfectly with his previous policy proposals dealing with jobs and education.

“Studies show that at-risk children who do not receive high-quality early childhood education are 70 percent more likely to be arrested for a violent crime by age 18,” he said. “I’m running to be the ‘Education Governor’ because improving the quality of life in Arkansas on everything from poverty and crime to homelessness and hunger starts with education. By implementing my crime plan, along with strengthening public education and pre-k in Arkansas, we can reduce crime, create jobs and make Arkansas an even better place to live, work and raise family.”

Link here for a PDF report of Ross’ plan.

J.B. Hunt Transport Services picked up steam in the second quarter after a sluggish start to fiscal 2014. The Lowell-based logistics firms reported solid net profits of $93.4 million, up 6.3% from the $87.7 million pocketed in the year-ago period. 

The results were inline with Wall Street’s consensus 79-cent earnings per share estimate, improving from the 73-cents per diluted share earned in the second quarter of 2013.

Top-line revenue grew in the quarter to $1.55 billion, up 12.3% from the $1.38 billion reported a year ago and surpassing Wall Street’s estimate of $1.54 billion.

All four of the company’s divisional pistons were firing in the quarter, despite some challenging metrics in the intermodal and truckload operating segments.

“The slowdown in train velocity and the difficult driver recruiting environment has challenged our (intermodal) growth in JBI. We are pleased we were able to maintain profitability levels despite these obstacles. The worsening driver supply conditions will continue to be a headwind for (dedicated contract services) DCS and (truckload) JBT as well. The planned improvement in truckload is ahead of schedule and though there is more to do, we are extremely pleased with the progress thus far,” CEO John Roberts III, said in the release. “While we continue to work to improve customer service and equipment utilization levels to achieve our expected market growth, the second quarter results demonstrate the combined earnings value of our four diversified, yet integrated, business units.”

HIGHER PRICING, MORE LOADS
The robust gains in top revenue were attributed to an 8% load growth in the intermodal division and 15% more loads covered in the firm’s brokerage division – Integrated Capacity Solutions. More loads helped to drive 9% and 31% increases in the segments, respectively.

The Dedicated Contract Services segment’s revenue rose 15% behind the better productivity from several large private fleet conversions implemented a year ago. Tyson Foods’ live haul operation is one of those private fleet conversions.

The laggard truckload segment, under the new management of Shelley Simpson, returned better than expected results. The truckload segment reported flat revenue, despite running an 8% smaller fleet.

“The company is increasingly becoming a provider of logistics solutions for its customers. Shelley Simpson is driving the effort and is providing strong leadership in sales and marketing plus the integrated capacity solutions unit,” said John Larkin, an analyst with Stifel Nicolaus. (Stifel conducts investment banking services with J.B.Hunt and is compensated accordingly for those services.)

Larkin recently said it makes sense for Simpson to lead Hunt’s “long suffering truck unit as some ICS customers prefer JB Hunt to provide its own truckload services as a component of integrated solutions.”

“While the truck unit, at its reduced size, will never be all things to all people, it can be a valuable arrow in Simpson’s quiver as she and her teams work to continuously optimize the supply chains of the company's customers,” Larkin, who is neutral on these shares shares, noted last quarter.

Hunt reported operating income of $159 million in the second quarter, versus $147 million a year ago. The increase in operating income derived from load growth, customer rate increases and freight mix changes was partially offset by lower box turns from slower train velocities, higher driver recruiting and retention costs, higher purchased transportation costs, higher safety and insurance costs and increases in equipment and tire costs compared to second quarter 2013.

BULLISH OUTLOOK
Wall Street approved of Hunt’s second quarter performance as shares (NASDAQ: JBHT) rallied on the news trading up nearly 2% at $76.02 in afternoon trading. Volume was heavy with more than 887,000 shares changing hands before noon. Average daily volume for the company is 767,000.

Economists view logistics companies such as Hunt as a barometer on economic growth given they are hauling goods on everything from big screen televisions delivered to consumer’s front door to live chickens supplying restaurants and grocers to millions of items and fixtures for Wal-Mart Stores and dozens of other retailers.

Analysts with Stephens Inc. rate J.B. Hunt shares as a buy with a target price of $87, despite a shaking first quarter.

“We remain encouraged by recent trends in the business now that abnormally harsh 1Q weather is behind us. We continue to view JBHT as a core transport holding and a bellwether in the domestic transportation space, and view recent anecdotes of tight truckload capacity as a leading indicator for an improving intermodal rate environment,” said Brad Delco, analyst with Stephens. (Stephens conducts investment banking services for J.B. Hunt is compensated accordingly.)

While analyst and Hunt management expect a strong back half of 2014, it won’t be without a few challenges. Costs related to driver recruitment and higher driver pay, rising insurance expenses and increased equipment expenditures will have to be factored into the bottomline this year. Stephens estimates Hunt will earn $3.15 per share this fiscal year, gaining some momentum in the next two quarters behind strength in all four of its operating segments.

SEGMENT RESULTS
Intermodal
Segment revenue of $931 million, up 9%
Operating income totaled $113.4 million, up 2%
Loads increased 8%, revenue per load rose 1.5%, excluding fuel surcharge.
68,700 units of trailing capacity and 4.500 power units available to the dray fleet.

Dedicated Contract Services 
Segment Revenue of $348 million, up 15%
Operating Income totaled $30.3 million, up 2%
Loads increased 23%, revenue per load rose 1.2%
625 new revenue producing trucks were added in the quarter to 6,538 units.

Integrated Capacity Solutions 
Segment Revenue of $173 million, up 31%
Operating Income totaled $ 6.2 million, up 50%
Loads increased 15%, revenue per load rose 14%.
Two new branches opened in the quarter bringing the total branch count to 26. The carrier base increased 9% and the employee count increased 23% to 36,300 in the quarter

Truckload
Segment Revenue of $101 million, flat
Operating Income totaled $ 9.4 million, up 217%, helped by $2.8 million gain from equipment sales.
Hunt operated 1,860 tractors compared to 2,018 a year ago at the end of the quarter.

Crawford County's home sales may have fallen off in May, but the northern neighbor to Fort Smith more than made up for a disappointing May with its June sales report. The county saw $9.089 million in sales on 69 homes during June, a 182.84% spoke from June 2013's total of 36 homes sold for $3.213 million.

Sebastian County also posted gains, though the numbers were not anywhere near triple-digit growth. Sebastian County posted $19.068 million in sales on 126 homes last month, an 11.12% improvement over June 2013, when 119 homes were sold in the county at a value of $17.16 million.

For the first six months of the year, Crawford County has increased sales volume of 46.55% from $23.244 million during the first six months of 2013 to $34.064 million during the same period this year.

Sebastian County posted a 9.09% gain from $77.894 million during the first half of 2013 to $84.977 million during the same period in 2014.

Vickie Davis, an agent Sagely & Edwards Realtors in Fort Smith, cautioned against reading too much into the meteoric increase in sales volume for Crawford County last month or even for the first part of this year. She said the likely culprit for the spike in home sales in the county was a mix of several homes on large tracts of land being sold coupled with more speculation that Rural Development loans will come to an end in Van Buren, the county seat and its largest city.

"A lot of people are trying to get things cleared out before that (Rural Development) stuff happens," she said.

Even though the Rural Development Loan Program was funded through the most recent Farm Bill passed by Congress and signed by President Barack Obama in February of this year, Davis said loan officers have notified her and other realtors working in Van Buren that the city would become ineligible on Oct. 1.

While the most recent Farm Bill raised the population limits for eligible cities to 35,000 people, the loan program's guidelines state that if a city is contiguous to a metropolitan statistical area — as is the case with Van Buren and Fort Smith, though the two are separated by the Arkansas River — those cities could be removed from the program.

While this will not impact the county's other cities like Alma, Cedarville or Mulberry, it will impact sales in Van Buren since requirements for Rural Development loans are not as strict as traditional fixed-rate loans.

Davis said anyone wanting to secure a home using the Rural Development option in Van Buren should act fast.

"If you're really interested in purchasing something right now, you need to get with it in the next three weeks," she said, adding that getting in now is necessary to give a bank time to get the loan fully processed. She said processing a loan only takes an average of 30 days, though she always advises clients to give it six to eight weeks.

As for the large properties Davis said could be a part of the increase in values, she cited one home on a large acreage that sold for more than $1 million, as well as another home on property that sold together for $760,000.

"All you need is a few things like that to bump it up," she said.

The average sale price for the county appears to reflect the higher priced homes sold last month, as June 2014 showed an average sale price of $131,720 compared to $89,263 in June 2013. The total represents a 47.56% increase from the same month last year.

Sebastian County's average sale price increased 4.95% from $144,202 in June 2013 to $151,336 last month.

Home Sales Data (January - June)
• Crawford County
Unit Sales
2014: 300
2013: 220

Total Sales Volume
2014: $34.064 million
2013: $23.244 million

Median Sales Price
2014: $104,000
2013: $105,000

• Sebastian County
Unit Sales
2014: 645
2013: 570

Total Sales Volume
2014: $84.977 million
2013: $77.894 million

Median Sales Price
2014: $115,000
2013: $115,000

Consumer spending, which accounts for two-thirds of the nation’s gross domestic product, remains fickle as signs still point to timid behavior despite heavy promotional activity from retailers. And consumer activity is a widely watched metric among Wall Street and economic forecasters, particularly now that the second quarter earnings season is underway.

A Commerce Department report issued Tuesday (July 15) depicts a mixed bag with the slowest retail sales growth in more than two years rising just 0.2% last month. The results were well below the 0.6% Wall Street economists had expected. Set aside auto sales and the gain was 0.4% — just below economists’ expectations of 0.5% growth.

Retail and food services receipts overall were hindered by a slump in auto, home building and garden supply stores, and restaurant sales also dipped lower. On a positive note, grocery sales rose 0.1%, drug store sales increased 0.9%, while clothing and accessory store sales grew 0.8% from the prior month. Online sales rose 0.9% from May.

On a year-over-year basis all the category sales increased with the exception of music and books, down 2% and general merchandise store sales, down 0.1%.

Analysts agreed that while the headline number for June was disappointing, there were some underlying pockets of strength.

“Consumers are spending, selectively,” noted Jim Baird with Plante Moran Financial Advisors. 

The June sales headline was disappointing but overall the number reflects a solid ending for the second quarter, and much improved over a dismal first quarter, according to Chris Christopher Jr., economist and director with IHS Global Insight.

Several retailers have reported disappointing sales in the past month. Family Dollar and the Gap have all blamed falling sales on consumer caution. However, Costco and Kroger  have reported solid sales growth.

WAL-MART CONSUMER
Wal-Mart does not report monthly sales but the retailer continues to speak on behalf of consumer behaviors it witnesses, tracks and studies on a regular basis.

The retail giant said almost 80% of its store sales are generated by just 30% of its customer base which it classifies as loyalists. Stephen Quinn, chief marketing officer for Walmart U.S., told prospective suppliers at the July 8 Open Call event that the super loyalists spend on average $6,877 a year with the discount retailer and they make nearly twice as many trips (90) as other loyal consumers shopping across all categories. This important demographic comprises 43% of Wal-Mart’s store sales annually.

Quinn said two other groups of loyalist shoppers spend between $2,127 and $3,341 per year with Wal-Mart and make up a combined 34% of total store sales. Quinn said the socio-economic make-up of this loyalist group is diverse with respect to ethnicity, income and age.

GENERATIONAL SPENDING
Wal-Mart research shows that while Gen X is the largest group among its loyalist shopper base, Baby Boomers, Millennials and Seniors are all within a few percentage points. In terms of income, just as many households earning more than $100,000 a year shop at Wal-Mart as those earning less than $29,000. The biggest demographic income range is $40,000 to $49,000, with just a 1% difference in demographic size earning between $50,000 to $69,000, and another 1% difference below that earning between $70,000 to $99,000.

Quinn said the figures debunk the notion that Wal-Mart only appeals to lower income households.

He also said the prolonged economic recovery has favored those households with more income. Quinn said customer’s spending power among the top 1% has risen by nearly 12% since the recession ended. The bottom 90% has seen declines of 2% among in the household spending power since the recession ended.

For those households earning less than $50,000 the recovery and wage growth over the past year has been flat. Middle income to $100,000 has seen a slight uptick, while households earning more than $100,000 have seen positive improvements over the past year, according to Quinn.

He said the Wal-Mart customer is diverse, and in many ways resembles a slice of America, but the one thing all Wal-Mart customers have in common is their appreciation for value and low prices.

The Fort Smith Board of Directors defeated an ordinance Tuesday night (July 15) that would have repealed a section of city code which allows a majority of the Board to remove items placed on the agenda. The ordinance up for appeal has been in place since 1971.

The ordinance, proposed by City Director Pam Weber, received no support from the group of four directors named as defendants in a lawsuit by Fort Smith resident Jack Swink. Swink sued City Directors George Catsavis, Keith Lau, Mike Lorenz and Vice Mayor Kevin Settle for violation of the Arkansas Freedom of Information Act after the four were either contacted by or made contact with City Clerk Sherri Gard seeking removal of two items that would have established a committee to review whether the city should continue with outside legal counsel or hire its own staff attorneys. Another item removed by the four would have appointed an auditor to investigate legal billings after attorney and blogger Matt Campbell alleged the Daily and Woods Law Firm had over billed the city for certain services and had billed for work not performed in some cases. Gard and the city were also named as defendants.

Catsavis abstained from the vote, saying he was concerned about taking any action considering the litigation against himself and the city. Lorenz said he did not find taking action while engaged in litigation "not appropriate," and added that he was upset that only the directors who voted to remove the items were named in the suit.

"To make an action like that during the process of a lawsuit is not appropriate in my opinion. And voting yes or no, I don't know what that does (to me) as a defendant in a lawsuit. Whether I make a motion or whether I vote yes or no, what statement does that make? I've got several issues with this whole thing. One of which is the fact that only the four directors who chose to remove it were named in the lawsuit and everyone else was involved in the process. Whether you voted no… if you said you want it removed or you want it left, you participated in this process and I have a real problem with that."

City Attorney Jerry Canfield was asked for his legal opinion regarding a vote on the ordinance and how that would potentially impact the lawsuit. He responded that he believed a vote to remove the ordinance would have given ammunition to attorney Joey McCutchen, Swink's legal counsel, which he suggested McCutchen would use in court.

"I expect they will (mention it in a trial) and then the other party's going to contend that no, it's not appropriate. It's a past action already taken place. (The case) should be judged on a law that was in place during that time. But however this issue is decided legislatively tonight, someone may try to take advantage of that and make a point in the litigation. So I think your vote tonight may very well affect the litigation. I'm not sure that it should, I just know the past experience that somebody will try that and see how it sits with the judge."

Canfield added that he would "prefer not to deal" with the results of a vote that would have repealed the ordinance that allows the removal of items.

Lorenz chimed in after Canfield's statements, adding that "regardless of litigation, I do not support this ordinance." He also said Weber's addition of the item to the agenda was "knee jerk" and not well thought out, which he said was another reason for the ordinance Weber was attempting to have repealed.

Lau — whose Tuesday request to hire his own legal counsel at city expense apart from Daily and Woods was approved by the Board before the repeal vote — said the Board needed the ability to remove agenda items to protect itself from going "down the rabbit hole" represented by "a minority of the people," which he called "a total waste of time."

Merry said he had heard from citizens who had reached out to him simply want transparency.

"The feedback I'm getting from the people is get the business (of the Board) done when it's done in public. People want us to vote. If the vote goes against the item's author, so be it. Democracy has spoken. I am for the people's will being done. We are elected to represent the people. The motive of the motion that Pam brought up is to ensure that items are voted on in front of the people."

Weber also spoke and said "the world is a different place than 1971. We live in a much different world. We live in an electronic world and people want to be more aware. Citizens want more transparency in their government and I think they deserve it. When things are more transparent, citizens are more happy."

"Yes, we're a policy Board. But the minority has lots of things to say that the majority needs to listen to. If two directors have something to say or worthy of discussion, sometimes that discussion will bring out a better understanding of viewpoints."

Vice Mayor Kevin Settle said he was against the repeal and said each member of the Board was given the ability to participate in the process and said another section of the city code allows four directors to add something to the agenda by contacting the city clerk, just the same as removing items.

"I'm not in favor (of a repeal) at all. Every director has participated. It's no different at all," he said.

The final vote was Merry and Weber voting for the appeal, while City Directors Andre Good, Lau, Lorenz and Settle voted against the repeal. Catsavis abstained from voting.

The Board also met in executive session for more than an hour and 45 minutes to conduct City Administrator Ray Gosack's performance review.

Following the executive session, the Mayor Sandy Sanders made the following statement about the closed-door meeting: "We've had a very good discussion and find his performance very acceptable. We will plan to conduct the performance review at the same next year."

No city directors would speak about Gosack's performance review, explaining that they were not at liberty to discuss personnel matters. Gosack did comment and said he valued the information he received during the review, which he said is the result of a constant back and forth regarding his performance throughout the year.

"I'm pleased with the feedback the Board has provided and they seem to be satisfied with the work that I'm doing. And I'll continue working to make things better in supporting the Board of Directors and Mayor. … I communicate regularly with the Board because if there are concerns, I want to know about them early when they're much easier to deal with rather than waiting until they're a raging fire."

In other business, the Board:
• Approved a resolution "regarding the issuance of bonds for the purpose of assisting in the financing of an industrial facility to be located within the city." The bonds will be used to construct ArcBest's new headquarters; and
• Approved a resolution to "approve financial assurance agreements in lieu of a performance/payment bond, providing financial security to the City that the River Valley Sports Complex will be completed…"

Former Arkansas governor and U.S. Sen. David Pryor, along with his wife Barbara, journeyed across the state Tuesday (July 15) as they campaigned for their son's re-election to the Senate.

Former Arkansas State Sen. Ed Wilkinson, president of Farmers Bank in Greenwood, told a crowd assembled in the main bank branch's conference room that he could not have been more proud to have the elder Pryor making a campaign swing through Greenwood and Sebastian County for son Mark Pryor's re-election to the U.S. Senate this year.

"I was in ninth grade. I put up yard signs. I went door to door. And then, back in those days the bank was over in the other building and on Saturday mornings, we would have a huge backup of traffic in the drive in windows and mother would give me a stack of David Pryor (pins) and said, 'Don't come back until you've run out.' Then I'd run out of those. I'd go to ever car and give one and then I'd go get me some more. I'd do it every Saturday morning. Really, that was my first venture into politics was working for at the time David Pryor for Governor campaign. Just enjoyed it immensely and we have all these fond memories. And now we've also always showed out support for his son, Mark, who has served us so well."

In an interview during the event, Pryor said his tour across the state soliciting votes for his son's re-election effort was about bringing back traditional grassroots methods to a campaign heavily focused on television and the Internet to reach potential voters.

"Well, Barbara and I believe the real thing that's going to make a difference in this race is old timey, old fashioned politics — asking people for their vote, going on the courthouse squares. Today we were in Conway, we went through the courthouse, we went through the square, we called on various businesses, we went to the senior citizens center and just stopping people on the street. And we think just going through the state and just doing it the way we used to do it is authentic and real and they get to know someone who knows the candidate."

Pryor said the one on one relationships politicos can make with voters would make a difference in close races, like the one the junior Pryor — a Democrat — finds himself in against freshman Republican U.S. Rep. Tom Cotton of Dardanelle.

"This is the age of electronic media and Facebook and all like that, but we think that this is the important way to campaign."

During his address to those gathered at the bank, Pryor said while his son "does not like to talk about his opponent, I do." He elaborated during the interview, attacking Cotton's voting record since taking office as the 4th District congressman in January 2013.
"We also say we're motivated by the fact that Mark's opponent is someone who, I think, has kind of lost — I'm going to be careful how I phrase this. I don't want to be too negative, but he has moved away from his own delegation, even his own Republican delegation in voting in some crazy ways."

He also took Cotton to task for his vote against the Farm Bill.

"Agriculture is 28% of our economy here in Arkansas," Pryor said. "We just don't understand why he's sort of, I don't want to say lost his way, but he has certainly left the main thinking, I think, of Arkansas."

Having spent much of his life in elected office, Pryor knows a thing or two about poll numbers and he said the situation the junior Pryor finds himself in presently positions him well entering the general election. A recent Impact Management poll had Pryor down slightly against Cotton with about 10% undecided.


"I tell you what, it's so much better than it was a year and a half ago. We feel very optimistic. We've had the greatest and warmest response I think we've ever had in any campaign. We've had a lot of campaigns. People are just beginning to think about this decision they're going to make. They've seen on television all the commercials and now they're beginning to make up their own mind. There's very few people undecided in this race. There's fewer people undecided right now than in any race that I've ever seen. It's like 10% or 12% or something like that. So it's where the battle ground is is for that little sliver out there. But we're making a broad-based appeal and we just feel good about it."

Even with the positive feeling the campaign has going into the general election in the next four months, Pryor acknowledged that when it comes to fundraising, the Cotton campaign will likely continue to out-fundraise his son. In the most recent fundraising report, Cotton reported raising $2.28 million during the second quarter of 2014, while Pryor raised $1.5 million.

"There's no way we can compete with the money that Mr. Cotton is raising. … We don't have Karl Rove, we don't have the Koch Brothers, we don't have a lot of the huge outside corporations that are giving to this campaign. But I truly believe we're about where we need to be and if we were way out ahead, all of our people would sit down and wouldn't work. Now they're going to work harder."

As for being back on the trail — visiting North Little Rock, Conway, Greenwood and Fort Smith just on Tuesday — Pryor admits to feeling some nostalgia on the trail as he visits many places where he burned shoe leather walking door to door, shaking hands and earning votes in his earlier years. And he said the energy of the volunteers supporting his son has energized him to keep campaigning through November.

"I enjoy it, yeah. It beats sitting at home. No, we're both (Barbara Pryor and the former Senator) having a good time. And I tell you what's encouraging, I think one thing that's encouraging to us is all the young people that are coming into this race literally from all over the country. New Jersey, for example, right here. He's never been to Arkansas," Pryor said, pointing to campaign press assistant Grant Herring. "And people from all over. Young people coming in from all over the country. They're watching this race. They're excited about this race. They know what the stakes are and to be around them and the coordinated campaign is truly exciting for us."

Hospitality tax collections in Fort Smith and Van Buren point to an uptick in area business and tourism travel, while a federal agency report indicates a national downturn in travel and tourism spending during the first quarter of 2014.

For the first five months of 2014 the Fort Smith Convention & Visitors Bureau collected $307,168, up 1.7% compared to the same period of 2013. The city collects a 3% tax on lodging.

May hospitality tax collections in Fort Smith totaled $65,730, up 6.9% compared to May 2013.

However, summer collections are expected to decline based on a convention schedule change by the Jehovah Witnesses.

“We anticipate collections decreases for both June and July of 2014 due to the Christian Congregation of Jehovah Witnesses (CCJW) holding only international conferences for the summer of this year in celebration of their Centennial Year,” said Claude Legris, executive director of the Fort Smith Convention & Visitors Bureau. “As a result, we expect to show substantial increases in the summer of 2015 when CCJW will meet in Fort Smith for four consecutive weeks.”

Collections in Fort Smith during 2013 totaled $731,057, down 2% compared to the same period in 2012. During 2012, Fort Smith hospitality tax collections totaled $746,182, up 5.37% compared to the 2011 period. The 2011 collections were up 4.3% compared to 2010.

Hospitality tax collections in Van Buren for the first five months of 2014 total $178,758, up 2.16% compared to the same period in 2013. The city collects a 1% tax on lodging and a 1% prepared food tax. May receipts totaled $37,734, up 2.3%.

The city has enjoyed three consecutive months of gains – up 2.9% in March, up 2.1% in April and up 2.3% in May. February was down 0.9%, but that followed a 4.4% increase in January collections.

“We continue to see a slow steady climb in revenues for all hospitality sectors, with lodging seeing the bigger increase in revenue over 2013. I anticipate continued slow growth over the remainder of the summer and fall,” said Maryl Koeth, executive director of the Van Buren Advertising & Promotion Commission.

Collections in Van Buren during 2013 totaled $423,221.83, remarkably close to the $423,222.91 during 2012. During 2012, Van Buren hospitality tax collections totaled $425,554, up 5.2% compared to the 2011 collections. Hospitality tax collections in Van Buren during 2011 totaled $429,561, up 2.34% compared to 2010. The 2011 collections ended a two-year skid in Van Buren.

ARKANSAS TOURISM BOOST
Collections of Arkansas’ 2% tourism tax during the first four months of 2014 totaled $3.96 million, up 6.5% compared to the $3.716 million during the same period of 2013.

The 2% tourism tax set a record in 2013 by reaching $12.716 million, and Richard Davies, the state’s tourism chief, predicted 2014 would be even better for Arkansas’ tourism and travel sector. March and April set records for collections of the state’s tourism tax for the months.

The 2013 collections were up 2.5% compared to the $12.405 million in 2012, and well ahead of the $11.378 million slump in 2009 when national economic conditions proved tough on Arkansas’ tourism industry.

NATIONAL NUMBERS
The U.S. Bureau of Economic Analysis reported June 27 that travel and tourism spending in the U.S. fell 1% in the first quarter after a 4.5% increase during the fourth quarter of 2013.

Real spending in the “recreation and entertainment” category dropped 11.2% during the quarter after posting a 0.9% gain in the fourth quarter of 2013. Real spending in the “food services and drinking places” category fell 3.5% in the first quarter after rising 7.4% in the fourth quarter.

The BEA report also included the following:
• Employment in the travel and tourism industries decelerated, increasing 2.1% in the first quarter of 2014 after increasing 2.7% (revised) in the fourth quarter of 2013;

• Total tourism-related spending was $1.5 trillion in the first quarter of 2014. It consisted of $873.1 billion (58%) of direct tourism spending and $625.7 billion (42%) of indirect tourism-related spending; and

• Total tourism-related employment was 7.7 million jobs in the first quarter of 2014 and consisted of 5.4 million (71%) direct tourism jobs and 2.3 million (29%) indirect tourism-related jobs.

Comparisons of legal billings among cities similar in size to Fort Smith show mixed results, with some cities spending more on legal services than the city of Fort Smith, while the city of Fayetteville spends less on an annual basis.

The cities, selected for comparison by The City Wire, have varied forms of government but similar sized populations to Fort Smith.

The review of comparative legal fees after City Directors Philip Merry and Pam Weber attempted to have an independent committee appointed to study whether the city of Fort Smith should continue hiring outside counsel to represent the city in legal matters or hire its own staff attorneys. Both times Merry placed the items on a meeting agenda — with a second from Weber — a majority of the Board directed City Clerk Sherri Gard to remove the item before a meeting was scheduled to take place.

Merry and Weber have made motions to get a vote on the committee and on hiring an outside auditing firm to review legal billings from the Daily and Woods Law Firm to the city after attorney and blogger Matt Campbell leveled accusations against the law firm of billing the city for services not performed and over billing for other services associated with a lawsuit Campbell had filed against the city. Twice the Board has used a city ordinance to have Gard remove the items from meeting agendas, which has itself now resulted in a lawsuit against the city and City Directors George Catsavis, Keith Lau, Mike Lorenz, Vice Mayor Kevin Settle and Gard for violating the Arkansas Freedom of Information Act.

The last time the city of Fort Smith researched hiring outside counsel versus employing its own staff attorneys was in 1999, in which attorneys David Vandergriff and Sherry Karber presented the following, according to a document included in a Board meeting packet from Jan. 21, 2000: "We believe the City of Fort Smith is currently receiving a good value for its legal service dollars. Nevertheless, while the city's current arrangement has been very stable during the recent past, circumstances can change in the future. If this were to happen, the city could find itself in a precarious position. We recommend that some consideration be given to planning for a transition of legal services if that eventuality presents itself."

According to billings provided by the city of Fort Smith to The City Wire, the city was charged a total of $274,230 in 2011, $396,902 in 2012 and $366,835 in 2013 for legal billings. An additional set of billings provided by Fort Smith's Finance Department Administrative Coordinator Christy Deuster for city departments ranging from utilities to the aquatics center under construction at Ben Geren Regional Park totaled $123,491 for 2013, bringing the year's total to $490,327. The total for 2013 represents a 78.8% increase from 2011's figure.

Comparisons to other cities show the latest legal billings for Fort Smith between four other cities reviewed by The City Wire on total costs. According to figures provided by each respective city, Edmond, Okla. (population 81,405 according to the 2010 census; commission-city manager form of government) budgets $400,000 for legal fees each year in addition to salaries for two full-time attorneys. The city of Lawrence, Kan. (population 87,643; city manager form of government), spent $883,561 to staff its in-house legal office of three attorneys, $235,864 of which was paid to outside law firms.

Lawrence City Attorney Toni Ramirez Wheeler told The City Wire the 2013 expenditures were higher than other years — the city attorney's office is budgeted annually at $800,000, she said — due to a variety of circumstances.

"In 2013, we had a number of special projects that our community normally doesn't have. We had a library, an $18 million library (that required legal work). We also partnered with (the University of Kansas) to build a sports facility that would be used by the city and KU. We had special legal fees for those two projects that we normally wouldn't have."

Another factor in the jump, Wheeler said, was the result of a federal lawsuit filed by a former city employee, though she said much of the cost for the city is meeting an insurance deductible for a policy that covers the city's legal expenses in the case of a lawsuit.

"We have an insurance policy that covers claims … they appointed an outside attorney to represent us. We are responsible to pay the deductible. We've been paying the outside attorney from our funds to meet that deductible."

Information provided by the city's office of finance show ups and downs in the total spending on the department, which also includes the city's prosecutor.

The city of Lawrence spent $803,333 for legal services in 2012, $689,181 in 2011 and $818,179 in 2010, meaning the 2013 total was the highest of the last four years at $883,561. The total represented an increase of 9.99% from the previous year's total.

The city of O'Fallon, Mo. (population 79,329), is the only city reviewed to have a city administrator form of government similar to Fort Smith's. Like Fort Smith, the city contracts its legal representation to an outside law firm. According to O'Fallon City Finance Director Vicki Boschert, the city budgeted $300,000 for its city attorney and budgeted another $98,200 for a personnel attorney. Included in the nearly $400,000 were fees attached to a city project, which Boschert said she was unable to separate from the overall legal budget.

Fayetteville (population 76,899 in 2012), the only Arkansas city reviewed, provided its 2013 budget which showed the elected city attorney ran his department for $283,625.57. The total included wages, materials and supplies, as well as services and charges. The city has a strong mayor form of government.

In an e-mail, City Attorney Kit Williams said the city only paid outside counsel one time during 2013 in spite of the city representing itself in appeals and other more challenging cases. He said the single use of an outside attorney was a fee was paid to the city's insurance company, which covers excessive force and other civil rights actions against the city of Fayetteville. A memo from Nov. 8, 2013, from Williams — who is running for re-election this year — to Fayetteville Mayor Lioneld Jordan claims that he has held increases below those of the overall city budget during his time in office."The budget request for my office for 2014 remains below what was budgeted for my office in 2008," Williams wrote. "Overall, as I will soon begin my 14th year of service as City Attorney, my office budget would have increased (if you approve the Administration's proposed budget) by less than 21% over those fourteen years. As a point of reference, the overall General Fund budget has increased by 68% during that period or more than three times as fast as my budget."

The memo also outlined what he said was was a rare instance where he his office had hired outside counsel in 2012.

"The last outside attorney I hired was used to gather documentation of how much Kum & Go was paying for the land on which to build its dozen plus new stores in Washington and Benton County. This investment paid big dividends as I used this information in our negotiations with Kum & Go which empowered us to obtain a much higher selling price per square foot for our Tyson property than Kum & Go's original proposal."

Salaries for the office were $212,576 last year, which included the salaries of Williams and Assistant City Attorney Jason Kelley.

Tucked away in eastern Rogers near downtown, the House of Webster has quietly provided gourmet specialty food items since 1934. While its brands of jams, baking mixes found local favor, the company ships thousands of gift packages across the country each year, and also co-packs for other brands such as My Brothers Salsa, a local company and supplier to Wal-Mart Stores Inc.

Celebrating its 80th anniversary this year, House of Webster is stirring up its product mix, redesigning its website with plans to offer consumers online retail shopping, which is now handled out its quaint Country Store adjacent to the corporate office in Rogers.

There might even be a subscription service in the works for consumers who want to try new products each month, though the company is still formulating those plans.

EARLY ORIGINS/GIFTING
Founder Roy Webster began selling baked goods and homemade preserves while he delivered newspapers some 125 miles each day back in 1934. His baked items were such a hit with his customers, Webster purchased a bakery in 1939 in downtown Rogers to keep up with demand, according to Ryan Castrellon, marketing manager for House of Webster.

In a move to sell more products, the young company began offering gift packages of their jams and baking mixes to corporations around the holiday period. The first customer to sign on was Harvey Jones, founder of Jones Trucking in Springdale, around 1946.

Castrellon said gifting is still a big part of the company’s overall business model which generates revenue in three ways: Gifting sales, wholesale and co-packing, all of which account for about a third of the company’s overall profits. The rest of the firm’s corporate gifting sales is repeat business.

He said during the economic recession, gifting sales receded but in the past year they have returned to normal levels and are the fasting growing of the three income segments. The company is working on programs that will incorporate year-round gifting, which is now mostly timed around the Christmas holiday season.

CO-PACKING NICHE
Because gifting is largely a seasonal business, House of Webster looked for other ways to utilize its facility and workforce with private label wholesale and co-packing services.

Helen Lampkin of My Brother’s Salsa uses House of Webster as a co-packer for her line of gourmet salsa products sold in Wal-Mart, Sam’s Club, Fresh Market and numerous other retailers across the nation. 

Lampkin told The City Wire that she first began making the salsa in her kitchen with her own recipes, but as demand for the product grew she sought to outsource the production while keeping control of the product formulation. House of Webster fit that bill, and the local manufacturer had a reputation for quality brands of its own, which was important to Lampkin. My Brothers Salsa also uses another processor in Alma for some of its co-packing needs.

Castrellon said co-packing involves working with the brand owners to make the product to their specifications, using their recipes and labels. Product is then shipped out to the customer on a wholesale basis. He said the company continues to grow its co-packing sales thanks in part to the success of companies like My Brothers Salsa.

OPERATIONS 101
In 2006, House of Wester was sold to Griffin Foods, but it still maintains its own brands and continues to develop new products through its research and development team and chef who work in the 100,000-square-foot manufacturing facility in Rogers.

“We are in the midst of expanding by adding a 24,000 square-foot freezer unit, which will allow for bigger orders of ingredients used in our products,” Castrellon said.

About 100 people work at the Rogers plant where they cook and package more than 100 products onsite under their own brand. But they also do a large volume of private label business for retailers on a wholesale basis. Private label contracts make up about half of the company’s wholesale business.

The one plant in Rogers can produce about 34,000 pint-size jars of food items each day from jelly, preserves, sauces, pickled vegetables, salad dressings, salsas and mustards. The best selling product today is apple butter, according to Castrellon. Annually, he said the plant turns out 6.7 million jars of product.

WHAT’S NEXT
“We are excited to introduce several new products in the coming months starting in August with four new condiments. The mustards include Honey-Horseradish-Dijon, Jalapeno and Ozark Stout Ale. We also have a garlic, herb mayonnaise. These items debuted in the Fancy Foods show in New York and were very well received,” Castrellon said.

In January, he said the company will introduce four new pepper spreads that are infused with fruit flavors like strawberry, blueberry, raspberry and mandarin orange. The pepper spreads can be used as cooking sauces, marinade or eaten with bagels or breads.

He said the company will also unveil a custom label service on its website that will allow customers to order products with their own personalized labels which can be given as customer appreciation gifts or as tokens of appreciation at weddings or other festivities.

“We recently tested this application with two local businesses who said they got great positive feedback from their customers who liked the products. We do not plan to impose minimum orders on this feature and hope that individual consumers will use it,” Castrellon said.

The local foreclosure markets in Northwest Arkansas and the Fort Smith metro areas continue to slow with fewer filings each month following a national trend.

Throughout the first half of 2014 there were 406 total foreclosure filings in Benton and Washington counties, down 62% from the same period last year. That rate of decrease was nearly three times the level reported for the U.S. housing market, according to Irvine, Calif.-based RealtyTrac.

There were 613,874 U.S. properties with foreclosure filings — default notices, scheduled auctions and bank repossessions — in the first half of 2014, down 23% from the first half of 2013. The report also shows that 0.47% of all U.S. housing units (one in 214) had at least one foreclosure filing in the first six months of the year.

Foreclosure filings in Arkansas fell 42% from a year ago. In the Fort Smith metro area, Sebastian and Crawford counties reported 111 foreclosure filings from January through June of this year. The number of filings declined 57% from the same period in 2013.

RealtyTrac reports that June filing numbers were lowest since the housing bubble burst in 2006. In Benton County there were 44 new filings recorded in June, compared to 103 a year ago. Washington County reported 28 new foreclosure filings in June, down 56% from a year ago. 

Sebastian County reported 44 new foreclosure filings in June, down 47% from a year ago. Crawford County had 7 new filings last month, compared to 23 filings in June 2013.

“Over the next six to nine months nationwide foreclosure numbers should start to flat line at consistently historically normal levels,” said Daren Blomquist, vice president at RealtyTrac. “There continue to be concerning trends in some states and local markets that clearly indicate those markets are not completely out of the woods when it comes to the lingering foreclosure problem left over from the housing bust.”

Arkansas is not one of those states. The Natural State ranks 42nd among the 50 states surveyed by RealtyTrac in terms of foreclosure activity.

The number of foreclosure listings in from Benton County to Sebastian County totaled 214 as of Wednesday (July 16), according to Jim Long, real estate agent with Crye-Leike in Bentonville. The distressed listings are a little higher compared to the 204 reported last month, but lower than the 322 listings of foreclosures in Northwest Arkansas and the Fort Smith metro area in December.

“While it’s important that any remaining foreclosure infection is addressed promptly to keep it from festering, foreclosures are no longer a widespread contagion threatening to derail the housing market’s return to full health,” Blomquist said.

More loan modifications also help to curb the number of foreclosure sales, according to Hope Now. The latest date available is from May which shows total loan modifications, short sales, deeds in lieu and workout plans outpaced foreclosure sales by a margin of almost four to one (approximately 151,600 solutions versus 39,700 foreclosure sales), according to Hope Now spokesman Brad Dwin.

In May, mortgage servicers completed 102,000 workout plans for homeowners. These are non-loan modification, non-foreclosure alternative that provide short-term relief for homeowners who continue to work on permanent options. Repayment plans and liquidation options are part of this category. Hope Now also reports completed foreclosure sales declined again in May by 4%, while foreclosure starts totaled 67,200 across the nation, up almost 4% from the the prior month.

At the end of the second quarter there were approximately 1.9 million mortgages that were 60 days or more delinquent, according to the Mortgage Bankers Association. Serious delinquencies have declined for three consecutive months.

Eric Selk, executive director for Hope Now, said there have been 7.05 million loan modifications made since 2007. 

“We have noted the number of short term solutions in this month’s data as well. These non-permanent options are crucial to homeowners who may have a loan modification or other permanent course of action on the horizon. There are myriad options for homeowners struggling to pay their mortgages and the efforts of the industry remain strong. Housing challenges vary from state to state and city to city and mortgage servicers have many tools at their disposal to handle these challenges,” Selk added.
 
FORECLOSURES (January-June)
Benton County
2014: 284
2013: 718

Washington County
2014: 122
2013: 356

Sebastian County
2014: 68
2013: 142

Crawford County
2014: 43
2013: 116

The River Valley Sports Complex took another step forward at Tuesday's (July 15) Fort Smith Board of Directors regular meeting with a vote approving a financial assurance agreements between the city and RVSC.

The city said the agreements would protect its interests.

"The assurance is a list of equipment or work with stated discounts or donations," wrote Fort Smith Parks and Recreation Director Mike Alsup in a memo.

"The city agreed to fund up to $1.6 million dollars for this project and Jake (Files) and Lee (Webb) agreed to provide assurances that the rest of funding needed or in-kind services and donations would be met," he told the Board Tuesday.

Alsup said the U.S. Army Reserve was preparing to go to work Aug. 1 on grading the property, which will be completed in about one months time. Alsup has previously reported to the Board that the military reserve units working at the site would work in two different two-week installments, with work slated to be complete August 28.


Webb said work was already taking place at the site in preparation of the Army Reserve arriving on site to complete its mission, which is being provided at cost (supplies, fuel, etc.) to RSVC as part of a larger training mission for the reservists.

Included in the Board packet provided to city directors and the media was a progress report of financial assurances, which estimated the national guard site work to be a total donated value to the organization of $1.2 million.

Other donations include the 62.9 acres of property at Chaffee Crossing donated by the Fort Chaffee Redevelopment Authority valued at $943,500, engineering and design work valued at $60,000, scoreboards valued at $40,000 and a portion of the concession stand and restrooms with a total donation of $150,000.

In all, donations for the site — according to the progress report — stand at a value of $2.394 million. Overall, the progress report said the total value of the site will be about $4.325 million though the estimated real cost will only be $1.591 million.

Some of the documents presented to the Board as part of the assurance did not necessarily have price tags attached, something Vice Mayor Kevin Settle said he would like to have seen. Webb said he and Files would make sure to add total price to many of the items donated by various corporations so the city has an idea of what the value of various donated items actually is.

If the estimated real costs hold true, the city will see the complex completed for slightly less than the $1.6 million committed to the project.

And the city could see a boost to the local economy as a result of the investment.
In an e-mail to the Board before Tuesday's meeting, Files pointed to a sports complex in Blaine, Minn., which recently had a $3.2 million expansion and is hosting a youth soccer tournament at the site.

"Tens of thousands of athletes and soccer fans are expected to descend on the Twin Cities this week for the USA Cup. The tournament is held every year at the National Sports Center – the largest soccer complex in the world. This year’s event includes 1,060 youth soccer teams, and more than 15,000 players from 21 states and 19 different countries. The tournament brings more than $20.4 million of economic activity into Minnesota every year," the press release said.

The RVSC has been touted by Webb and Files as a tournament quality field that would drive economic development and Files again made his point before the vote.

"This announcement shows what we have been saying all along. Our complex can be and should be an economic driver and will have an economic impact on our Region," he wrote.

The River Valley Sports Complex is scheduled for completion in the spring of 2015.

Consumers in Arkansas are not as optimistic as their neighbors in Missouri or Oklahoma and the there is division in sentiment within the Natural State as well, according to the first Arvest Consumer Sentiment Survey released today (July 17).

The consumer sentiment index for Arkansas was 67.4, trailing that of Missouri (68.6) and Oklahoma (76.4). The national index for June is 82.5. The local survey was conducted in May and June by the Center for Business and Economic Research at the University of Arkansas and the University of Oklahoma’s Public Opinion Learning Laboratory.

“These new consumer sentiment data indicate that Arkansas can expect continued on-again, off-again growth. Until consumers indicate that they feel confident about their economic futures, personal income growth will be the key to additional spending and a breakout recovery. We will look forward to our next data point to begin telling us about trends in optimism,” Kathy Deck, director for CBER at the UA, said in a statement.

Deck said the initial readings indicate that consumers in the region, and especially in Arkansas, are “leery” about overall economic conditions in the near future, although they reported being relatively upbeat about their current financial status. 

“The consumer sentiment numbers seem consistent with the contradictory nature of other economic data for the state, particularly the declining labor force in the face of improving payroll employment,” Deck added.

The report indicates a rising degree of confidence among higher income levels and those with advanced graduate degrees. Arkansas families earning under $75,000 annually registered at 62.6 on the index, families earning more than $75,000 a year indexed at a reading of 82.2. A similar variance was found in the index by educational attainment with high school or less registering at 60.8, the same level as those with bachelor’s degrees. This was considerably lower than the 81.7 index level for consumers with graduate degrees.

As predicted, those with jobs have a brighter outlook than the unemployed ranks looking for work. The report found employed respondents in Arkansas registered a reading of 71.8, lower than the 74.2 for the three-state region. Unemployed Arkansans indexed at 57.3, below the 61.3 reading in the three-state area.

The Arkansas economy has demonstrated contradictory economic performance during the first half of 2014, according to Deck. 

Declines in the unemployment rate, usually considered positive overall, can be accounted for by declines in the labor force, which is not positive news, according to the Bureau of Labor Statistics. There are 16,000 fewer jobs in the state today than at the peak ahead of the recession. The Bureau of Economic Analysis reports that state personal income levels have grown faster than the national average since 2000 but declined at the end of 2013 and beginning of 2014 due to declines in farm income.

Homeowners in Arkansas were not as optimistic as renters according to the report. Homeowners indexed at 66.1, while renters had a reading of 68.6, both were below the respective regional readings of 71.1 and 69.8.

The presence of children in the home also raised the level the optimism among Arkansas respondents with a reading of 69.5, the same as the regional index level. Arkansas households without children indexed at 66.4, lower than the 69.9 level in the tri-state region.

The last subgroup in the survey was an index by age. Among Arkansas respondents those between the ages 25 and 44 had the highest reading at 73.9. Adults between the ages of 45 and 64 registered a 68.1 on the index. Young adults indexed the lowest at 54.8 while senior citizens 65 and older registered 62.3.

Again, Arkansas residents had lower sentiments by age category than the region as a whole, which indexed young adults 18 to 24 years at 73.3. Adults between 25 and 44 indexed at 78.3, while older adults (45 to 64) registered 69.3 and 63.4 for seniors over 65 years of age.

This first report will serve as a baseline for future surveys every six months, the next report is due out in late November, ahead of the holiday season.

“When Arvest first considered sponsoring this survey, we thought it would be beneficial for our communities to have an accurate reading of what consumers think about the economy in the states where we operate,” said Donny Story, CEO of Arvest Bank in Fayetteville. “These first results give us better, more localized, information than what has been available. What is important is simply knowing where people in Arkansas stand in their views — especially since consumers drive the majority of economic activity. With future results, we will be able see if sentiment in Arkansas is trending up or down with sentiment nationally.”

Arkansas commercial airport trends that began early in 2014 have continued through June, with traffic increases in Northwest Arkansas (XNA) and Fort Smith and enplanement declines in Little Rock.

Travelers flying out of XNA during June totaled 65,022, up 14.3% compared to the 56,889 during June 2013. For the first six months of 2014, enplanements at XNA total 308,961, up 8.34% compared to the same period in 2013. The January-June 2014 traffic is up 5.46% compared to the same period in 2007, the year XNA reached record enplanements of 598,886.

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

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

FORT SMITH TRAFFIC
The Fort Smith Regional Airport, served by flights from Atlanta and Dallas-Fort Worth, posted June enplanements of 8,393, up 6.56% compared to June 2013. Enplanements for the first six months of 2014 total 44,730, up 6.39% compared to the same period in 2013.

For all of 2013, enplanements at the airport totaled 84,520, down 2.46% compared to the same period in 2012. The decline ended three consecutive years of enplanement gains at the airport.

With 25,785 enplanements for the first six months of 2014, American Airlines accounts for 57.6% of commercial traffic out of Fort Smith. Delta Air Lines had the remaining market share for the first six months of 2014.

American enplanements out of Fort Smith are up 4.92% for the first six months of 2014 compared to the same period of 2013, and Delta enplanements are up 8.46%.

LITTLE ROCK NUMBERS
Enplanements at the Bill & Hillary Clinton Airport (Little Rock National Airport) were 99,066 in June, down 3.75% compared to June 2013. Enplanements for the first six months of 2014 were 514,958, down 6.19% compared to the same period of 2013.

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

Among the top three carriers in Little Rock, only one has posted enplanement gains between January and June. Southwest, the largest carrier, has seen enplanements decline 16.13% in the first six months. American, the second largest, has posted at 1.46% gain in the period, while Delta has a 2.44% decline in enplanements during the first six months of 2014.

The two men battling to replace U.S. Rep. Tom Cotton, R-Dardanelle, in Congress next year tackled the topic of infrastructure in separate interviews Thursday (July 17), just two days after the House passed a temporary fix to keep the federal highway trust fund afloat until the middle of next year.

The bill, which passed with overwhelming bi-partisan support, would keep the trust fund afloat until May of next year. The New York Times reports that Senate Majority Leader Harry Reid, D-Nevada, would likely scrap the Senate's version of the bill in order to move the House version to a floor vote before the August recess.

Rep. Bruce Westerman, R-Hot Springs, cried foul and said the bill was essentially depleting assets from one fund to keep another fund afloat, which he said was not responsible governance.

"They're trying to keep the trust fund funded. But if you look at what happened there, they're robbing programs like the leaking underground storage tank fund, which people paid into it to fix underground storage tanks, not to have the money robbed and put into some other fund that it wasn't ever intended to go into."

The Republican state representative said moves like the one initiated earlier this week by the House signal why people are fed up with Washington.

Former Federal Emergency Management Agency Director James Lee Witt, the Democratic nominee in the 4th District House race, said he thought the bill was "good" but did have some concerns.

"I think it's good. Anything to help replenish that fund is going to be good for Arkansas," he said, adding his concern about whether the bill would properly address local infrastructure needs.

"The one thing I was concerned about, and I haven't gotten into that part of it yet, is particularly the federal aid side because the federal (aid for states) is the funding that cities and counties use for their bridges and roads, so I was concerned about that."

Witt released his own infrastructure plan this week, which focused on completing Interstate 49 from Alma to Texarkana, as well as construction of Interstate 69 in the eastern portion of the 4th District. The completion of these projects, he said, would lead to economic development during both the construction phase of the projects, as well as in the years and decades following completion of the projects for the communities along the interstate routes.

Asked how a freshman member of Congress from rural Arkansas could influence the House and Senate to pass the funding needed to complete the district's infrastructure needs, Witt said his eight years in Washington as President Bill Clinton's FEMA director would pay dividends for the expansive 4th District.

"Well, I've always believed that one person and one voice can make a difference. And I think I have enough respect on both sides of the aisle (from) the years I've worked with Republicans and Democrats that maybe I can have a stronger voice as a freshman than most people would."

He also said he was in favor of a bill by U.S. Rep. John Delaney, D-Maryland, that would create an "infrastructure bank" to make loans to states and municipalities to fund infrastructure projects. Bonds sold through the bank would theoretically be bought by U.S. corporations, which Delaney's House website said would allow "repatriation while ensuring U.S. corporations’ tax savings are truly invested in the U.S. economy to grow quality jobs" and encourages public-private partnerships.

"It is a very good approach. You know, we've got trillions of dollars in off-shore accounts. And by partnering with those corporations and allowing them to bring back some of that money tax-free and buying bonds to finance infrastructure projects, doing the 'infrastructure bank' is the right approach," Witt said. "But I think it's important that it's not only the federal government's role and responsibility, we're going to have to have a partnership with state and local and the corporate world, as well, in the private sector because it will benefit our economy, it will create jobs. And I think particularly in the 4th District, if we can get I-49 finished and I-69, it's going to really help the economic growth of the 4th District and it creates thousands of jobs."

Westerman said Witt's plan was short on specifics and workable solutions.

"I mean, he talks about the problem. He talks about (how) infrastructure's important to the economy and he talks about public-private partnerships, and he doesn't say what a PPP is there. Which that would be my first question there, is what exactly does my opponent mean when he refers to a public-private partnership? Is he talking about privately owned and operated toll roads and bridges? I'm not sure what he's talking about there."

Witt, a Dardanelle native and former Yell County judge, said he did not support the privatizing of public infrastructure, such as toll roads, though he suggested it should be considered at some point.

"I don't think that I would be for that right now, but at some point every option should be looked at so that we can get the full benefit of infrastructure projects. I think that working through creating this 'infrastructure bank' first and then seeing what we have to do when we get down the road. We've got to get some economic development in Arkansas and the fourth district particularly and I think we (should) look at all options, and what's best for Arkansas and what's best for the 4th District."

Neither man would say that earmarks would be a good way to fund construction of infrastructure needs — especially along the proposed route of I-49 — though the Office of Management and Budget shows several earmark-funded projects over a four year period along what is now I-49 in Northwest Arkansas.

Westerman said if elected, he planned to demonstrate the need for funding I-49 and other projects as a way to get them moved up the priority list for the federal funding versus attempts to get the House to reintroduce earmarks.

The Hot Springs Republican said the biggest challenge to infrastructure funding right now is a combination of wasteful spending at the federal level, specifically citing the Affordable Care Act, as well as challenges at the local level. He said a bill he introduced during the 2011 legislative session that would have eliminated sales taxes on construction materials for public projects like roads and bridges would have made a big difference in reducing the cost of projects across the state, many of which receive federal dollars.

"If that's a publicly funded project, you're borrowing the money to pay taxes and that money gets paid back by the taxpayers. So over a 20-year bond, you're paying 1.6 times or more the cost just to finance the sales taxes in the project," he said.

Whoever wins in November is sure to face additional fights over federal infrastructure funding, with President Obama having already proposed a $302 billion transportation program over four years and giving Congress a tongue-lashing over the bill passed earlier this week that funds the federal highway trust fund only through May 2015.

“Congress shouldn’t pat itself on the back for averting disaster for a few months, kicking the can down the road for a few months, careening from crisis to crisis,” The New York Times quoted Obama as saying. “We should be investing in the future.”