Four members of the Fort Smith Board of Directors would not comment on the 2 mil increase for the Fort Smith Public Library, with two directors planning to vote for the increase and one against.

A proposed millage increase to be voted on Tuesday (Aug. 12) would net the Fort Smith Public Library an additional $2.8 million in revenue, allowing the library to expand offerings and upgrade technologies to meet customer expectations, according to library officials.

Library Executive Director Jennifer Goodson has said the current one-mill of property taxes accounts of about $1.4 million of the library's annual operating budget. Additional funding comes from the countywide sales tax, of which the library receives 6% of the city's share of revenue. The amount totaled $921,239 in 2013 and was budgeted at $925,572 this year.

Another revenue source for the library includes $100,000 in fines and fees collections. The library also receives some state funding and grants. The library's 2014 budget was set at $2.7 million.

Should voters approve the two-mill hike on Aug. 12, Goodson said the additional $2.8 million would slightly double the library's budget and allow the largest library system in Sebastian County to expand its offerings.

The City Wire recently asked the seven members of the Fort Smith Board of Directors and Mayor Sandy Sanders if they were for or against the millage increase. There was no response or a response of no comment from Directors André Good, Keith Lau, Mike Lorenz and Kevin Settle, and Mayor Sanders. Sanders’ wife has appeared in advertisements supporting the millage increase.

Director George Catsavis said now “is not the time for this millage increase.”

“First I want to say that I have always supported the library and will continue to do so but I can not support this millage increase,” adding that he believes the library is “very solvent.”

“Also our senior citizens that have their property taxes frozen will not be protected with this millage increase. (T)hey will pay more and the ones on a fixed income will be hurt the most and I know the middle income people of Fort Smith are still having a tough time,” Catsavis wrote in an e-mail note to The City Wire.

City Directors Philip Merry Jr. and Pam Weber are for the increase. Their full statements are below.

City Director Merry: “I am FOR the library millage increase.

“I believe that a library is at the very core of the culture of a city.  I am hopeful of an absolute state of the art library facility that is not just up to speed but on the cutting edge of options for its “cardholders”.  Libraries serve its citizens of all ages and the fruits to be had are there for the asking. Note that all of the services are for free when one signs up for a Free Library Card…now and after the vote upcoming….

“I am proud to support the Library millage increase because I believe it to be an INVESTMENT rather than an expense that will return well on investment for the decades to come.”

City Director Weber: "I will be voting for the library mileage increase. The Fort Smith Library provides extensive services for all citizens. I have used the library for over fifty years and am constantly amazed at the quality of service provided and the range of those services. We live in a changing world and our citizens need the resources to compete - children and adults will be provided services with new technology.

“Businesses and nonprofits will be afforded the opportunity to do extensive research that is currently not available. Most of all, libraries have allowed citizens the opportunity to dream and learn - many of us have studied history and traveled the world and broadened our horizons through the library. I want my granddaughter to have those experiences and more.

“The City of Fort smith has done numerous citizen surveys - the library alway ranks at the top with citizen satisfaction.”

Retailers from Wal-Mart to Nordstrom are well aware of the challenges they face from ever-changing retail trends often driven by more consumer personalization and a plethora of subscription services that reduce physical store traffic and comparable sales.

Angelo Welihindha, head of hardware sales for Google and former Wal-Mart merchant and buyer for Sam’s Club, said consumers crave personalization features in their shopping experiences and that is not likely to change.

“Amazon has been offering personalization for some time on its site. Wal-Mart is playing a quick game of catch-up with Pangaea — its new e-commerce platform,” Welihindha said during his presentation on e-commerce at the NWA Technology Summit in Rogers on Aug. 11.

MAKE IT PERSONAL
WalmartLabs over the past year has unified all of the retailer’s online entities into a single in-house platform known as Pangaea. The retailer said Pangaea allows for more personalization, better customer service and more payment options.

Lowe’s is also doing more to allow consumers to find previous purchases for items like light bulbs, filters, plants or any product sold in-store or online. These personalization capabilities require continued investment, something Wal-Mart remains committed to, noting that ongoing acquisitions in the e-commerce division would shave a few cents off the bottom line profits this year.

Nordstrom recently anted up an estimated $340 million to purchase Trunk Club, an online personal shopping service for men. The five-year old Chicago-based startup offers a subscription-based service that’s like having a personal stylist on demand who picks out top designer labels and ships them to the customer’s home for free.

After signing up, men are interviewed by a stylist about their own personal tastes, and provide their measurements. They then receive their first “trunk” – a box containing a selection of clothing and other items, and they only pay for what they don’t mail back within 10 days. Trunk Club did more than $100 million in sales last year, proving that there are plenty of men who want help with their wardrobe.

“Trunk Club operates a bit more like a personalized shopping service and it is a perfect fit for Nordstrom and very ‘in brand’ given its well-known reputation for personalized customer service,” said Carol Spieckerman, CEO of NewMarketBuilders in Bentonville.

Jason Long, CEO of Shift Marketing, said brick and mortar retailers have an opportunity to drive in-store traffic through the use of various personalization practices.

“Home Depot for instance knows which customers are shopping for certain power tools online or who shops the store regularly for upgrades and latest models. They could take that information and notify the customer by email or text as soon as a new model becomes available ... perhaps offer a coupon to get them to pick up in-store. Research shows that 30% to 40% of those who order online and pick-up in the store also purchase items when they come inside,” Long said.

He said while there is some capital outlay needed to make the personalization possible, it’s more likely upfront costs could be recovered if more traffic is driven into the store.

PERSONAL OPPORTUNITIES
Retailers like Old Navy, Wal-Mart and Amazon are looking for ways to connect with their shoppers and they are consciously looking at abandoned online shopping carts. Old Navy will often send an email to the shopper who has abandoned items in an online cart. The email typically offers a deeper discount than previously extended. Wal-Mart and Amazon also send emails, with price notifications if there has been a rollback.

Experts see opportunities for more personal interaction between a retailer’s online and physical stores.

“Managing shopping cart abandonment and serving up relevant deals in the digital space are one thing but the next step will be to bridge digital browsing and purchasing behavior with physical retail,” said Spieckerman. “Many of the digital solutions available today are isolated to that environment and focus on digital conversion yet shoppers are channel agnostic.”

She said the next opportunity is to remind shoppers of their online journeys and choices while they are in the store, most logically through retailers’ shopping apps. For example, she said retailers could offer a personalized promotion on an item that was abandoned in an online shopping cart while a customer is in a store. 

“In the meantime and back to the digital-only environment, Google is said to be testing a capability that will connect mobile browsing with mobile apps, which will allow marketers to create seamless campaigns and promotions across both, rather than building them in silos. This is an exciting development that promises to shore up the digital marketing opportunity,” Spieckerman said.

Long said many retailers are already reaching out to consumers who abandon items in their online shopping cart through Facebook and other social media feeds. Images of those abandoned or previously browsed items seemingly follow the user around on the social media sites as a subtle reminder from the retailer.

SUBSCRIPTION CRAZE
Welihindha also said popularity of subscription services linked to a membership are a changing dynamic in the traditional retail space. Consumers may sign up on a plethora of websites for everything from regular delivery of dog treats to gourmet ingredients for dinner tonight or tomorrow night.

“Membership is really taking off. It goes much further than apparel, “ Welihindha said.

Naturebox will deliver five full-sized healthy snack packages to the front door. The product can be chosen by the subscriber or they may opt for the surprise package. Founded in 2011, the California-based snack company launched 60 products and shipped 50,000 boxes in 2012. Last year it added 100 more products and shipped a million boxes as more consumers look for healthy snack options.

BlueApron will deliver fresh ingredients in the exact amounts needed to prepare gourmet recipes. The subscription service claims to do the legwork for the consumer who loves to cook but has little time to plan and shop for the ingredients.

BirchBox is an online service that sends five beauty aids for men or women for a standard $10 per month. The personalized beauty and lifestyle samples that have been tailored to the consumer profile. The service allows consumers to try products from niche brands, up-and-coming lines and brand favorites.

BarkBox is a subscription service available monthly, quarterly or semi-annually. Subscribers tell the company how large their dog is and they select the frequency of delivery. BarkBox does the rest in choosing four or more products such as toys, treats and grooming products which are shipped to the subscriber’s front door. Subscriptions begin at $19 per month.

SUBSCRIPTION IMPACT
Welihindha said as subscription services become more mainstream the impact to retailers will likely be felt sooner rather than later. To that point, Michael Santoli, senior financial columnist at Yahoo!, said Tuesday (Aug. 12) that Wal-Mart, like many other retailers, continue to report lighter traffic and soft comparable sales. 

“They are struggling with too much square-footage at a time when the industry dynamics are changing toward online sales. Consumers have more options than ever and it's not that they are shopping less but perhaps spreading their spend around,” Santoli said.

Spieckerman disagrees with the sentiment that subscriptions result in lighter traffic.

“At this point, I don’t see subscription services making a major dent in big box store traffic. They are more of a novelty and in no way replace a stock-up or fill-in trip to a retailer,” she said.

Spieckerman said these types of services aren’t necessarily complementary to retailers’ core businesses either as Wal-Mart’s shuttering of its subscription service, Goodies Co., bears out.  

“That said, subscription services are a great way for brand marketers to introduce brands and products to new consumer groups and to inject an element of surprise into their overall marketing strategies. The results from these programs can then be leveraged to lobby for space within traditional retailers,” Spieckerman adds.

Just like Amazon Fresh is an add-on service for Amazon Prime, there are possibilities that Spieckerman sees for Sam’s Club, also a membership-based shopping experience.

“Sam’s more loyal members might consider a subscription service as a convenience option, and it could be a good fit for members that demonstrate high levels of engagement within Sam’s ecosystem – those who take advantage of Sam’s savings programs, travel services and other offerings. These members would have the trust level required for the service to make sense,” Spieckerman said.

Long said subscriptions seems to be more suited to niche areas and he does not believe the sales lost to subscription services are enough to move the needle backward at big box retailers. He adds that Costco and Sam’s Club could risk key impulse sales in their club if they bought too heavily into the subscription arena.

In a special meeting, the Fort Smith Regional Airport Commission on Tuesday (Aug. 12) approved entering into contract negotiations with Pro-Tec Fire Services to provide fire protection for the airport once the firefighting mission staffed by the 188th Wing ceases operations on Sept. 30.

According to John Parker, executive director of the airport, the airport chose to go with a contracted provider versus forming its own fire department due to communications problems with the National Guard Bureau in Washington, D.C., regarding the use of the 188th's firehouse and equipment.

"We looked at the variables and studied if we could take on the tasks ourselves, but at the time we were relying on the agreements that the National Guard Bureau had made (to the airport verbally) but we had a window of time where we weren't getting any feedback from the Guard Bureau, so that's when we opted to go with someone who could provide all of the elements of aircraft firefighting, personnel, training, all of those things. That's why we requested the proposals. In doing so, we requested the proposals for a turnkey (operation) all the way down to personnel."

While Parker has previously stated that contracting services could eat up to $750,000 each year from the airport budget — a third of the airport's total revenue— he expects the a final contract with Pro-Tec using National Guard-owned equipment could bring the total expended on the firefighting operation down to possibly half that total or more.

"We anticipate through the contract negotiations, and depending upon the execution of the Guard agreement with the station and equipment, that we anticipate spending between $200,000 and $400,000," he said. "But we do not know exactly. We need to enter the contract negotiations to see what levels of service we need. We won't be far removed from that on either end."

He added, "Obviously, one is an extremely low-case scenario and another is a little bit higher, but that involves more support."

An agreement with the Guard will secure use of the equipment for the foreseeable future at little to not cost, but Parker said the Federal Aviation Administration will eventually require the airport to purchase its own equipment or Pro-Tec will need to acquire equipment.

"It (the equipment and firehouse) will be basically available to us until such time we can manage our own equipment, but no monetary considerations at this point. But that is still an open question in the future and it's an FAA requirement that we have to enter into those negotiations a little bit down the road here," he said, adding that a timeline is not yet available for when the airport will have to secure its own equipment.

With the company now selected and negotiations underway with both Pro-Tec and the National Guard Bureau, Parker said he anticipates having the private firefighting company on-site by Sept. 15 to begin to "transition" the airport's firefighting mission in anticipation of the Sept. 30 shutdown of the 188th's firefighting mission and the Oct. 1 takeover by the airport's contracted provider.

"It will be close, but in the RFP (requests for proposal), we asked for them to plan to be on site and ready for a transition period on the 15th of September. That gives us some leeway and flux because everything doesn't work as people anticipate. The transfer of equipment will probably occur in that window, as well. But Oct. 1 is when we're responsible for fire protective services. The 188th will perform services on that last day of September and the next day we're the ones in charge."

In other business, the airport commission approved acceptance of a $4.9 million grant that will pay for completion of a major taxiway realignment by the fall of 2015. The grant was announced Monday (Aug. 11) and is believed to be the largest-ever FAA grant.

Including the grant from the FAA, the airport commission will expend a total of $5.199 million to complete the realignment of the Taxiway A West.

Arkansas should be able to expand broadband access to all public schools without extra state funding because it’s currently wasting too much money on outdated technology and is not effectively leveraging federal funds, members of the House and Senate Education Committees were told Tuesday.

Evan Marwell, CEO of the nonprofit EducationSuperHighway, said during the hearing that the state can reach the goal of serving all schools with one megabit per second per student by 2018.

Marwell spoke a day after announcing EducationSuperHighway’s partnership with the state during a press conference with Gov. Mike Beebe. EducationSuperHighway is working with the state at no charge as part of a pilot project that also includes Virginia.

Marwell said too many schools are connected inefficiently through the Arkansas Public School Computer Network (APSCN), which provides a broadband base for schools. APSCN has an annual budget of $21 million, including $11 million for connectivity and $4 million for distance learning, which recently has been phased out.

Those services, which are managed by the Department of Information Systems (DIS), cost an average of $286 per month per megabit – the equivalent of a household paying $2,800 to $5,700 for a cable modem, he said. That cost is due in part to the fact that some of the bandwidth has been built using outdated copper technology.

By contrast, the state’s most well-connected school district, Smackover in southern Arkansas, pays $1.50 for a megabit using fiber optics. All but 25 school districts purchase additional broadband from private providers at a cost of $13 per megabit.
Between state and district offerings, Arkansas provides an average of 117 kilobits per second per student at a monthly cost of $162 per megabit per second.

The state can also gain tens of millions of dollars by better leveraging federal funds it receives through eRate, the program that provides broadband funding for schools and libraries via a fee charged for telecommunications services. The state averages receiving about $4 from eRate for every $1 it invests. However, $6 million of APSCN’s cost is not eRate eligible. By better utilizing its funding to make those dollars eligible, Arkansas could see a significant increase in federal funds.

A group of 5-10 EducationSuperHighway staff members have been studying state data for about two months. After inventorying the state’s current broadband offerings, the group will work with the Department of Education, school districts, and private providers to expand broadband to schools across Arkansas.

Marwell told legislators that Arkansas was chosen for the project because it has already made a commitment to broadband access. Nationally, 51% of Arkansas schools have enough broadband for 100 kilobits per second per student, the current standard, compared to a national average of 37%. That still leaves 230,000 students in Arkansas not meeting that standard.

Joe Freddoso, who managed the pubic broadband backbone in North Carolina before joining EducationSuperHighway, said the group will have a better idea of the time frame for serving districts within a couple of weeks.

The issue of broadband connectivity has become an important one in Arkansas after it came to light that many schools did not have enough broadband connectivity to take advantage of digital learning opportunities or to conduct online tests as part of the Common Core State Standards.

State Rep. Linda Chesterfield, D-Little Rock, said in the hearing Tuesday that the news coming from EducationSuperHighway is hopeful. “Let me just say that this is the most exciting thing I’ve heard in some time, such great promise,” she said.

Beebe and the state’s private broadband providers have been at odds over whether to connect schools using private networks or the state’s ARE-ON network that connects universities, medical providers and others. Arkansas’ is the only one of 42 state/public networks that prohibits by law K-12 schools from connecting.

Beebe appointed a group of business leaders known as FASTERArkansas that has been pushing for the state to expand the ARE-ON network to public schools. Private providers do not want to compete with a government-managed broadband entity. They say they have already laid the foundation for a high-speed network, but schools have not connected to it.

Asked by state Rep. Debra Hobbs, R-Rogers, how ARE-ON would fit into the picture, Marwell said that in other states, the research education network serves as the broadband backbone. Its use would lower the cost of bandwidth in part because ARE-ON is part of Internet2, a research- and education-based network that saves usage costs because it connects directly to content providers such as Google. ARE-ON personnel also could provide technical services to schools.

“There is a big role for an organization like ARE-ON, and it would be a shame if Arkansas didn’t take advantage of it because frankly it will just end up costing you more money if you don’t,” he said.

Freddoso emphasized the need for dialogue between the state and private service providers outside of the lawmaking process. He said the representatives of the three largest service providers with whom he worked in North Carolina started as account managers and are now regional sales directors because of the increased state business.

Fredosso said Monday that he has had constructive discussions with private providers. Jordan Johnson, spokesman for Arkansas Broadband Coalition for Kids, which represents the providers, said in an email today, “The service providers are optimistically hopeful and welcome this effort as we move Arkansas forward. We are grateful for the work that both the legislature and the governor are doing to study this issue.”

Freddoso said North Carolina schools have doubled the amount of bandwidth demand in each of the past two years.

“Once we opened up the pipes and gave them scalable broadband, districts began to create ways to use the internet in education,” he said.

Sentencing in the high-profile fraud case of former Northwest Arkansas developer Brandon Barber has been moved from Aug. 13 to Oct. 28. The delay may allow Barber attorneys and the prosecution more time to support their respective arguments as to if Barber should go to prison for five years or more than 24 years.

No reason was given for delay of the sentencing hearing. U.S. District Court Judge P.K. Holmes III is expected to preside over the hearing to be held in the Judge Isaac C. Parker Federal Building in Fort Smith. Based on memos from the prosecution and Barber’s attorney, the sentencing testimony may require more than a full day.

BRIEF CASE HISTORY
Barber in July 2013 admitted to guilt in various schemes to prop up his Northwest Arkansas real estate and development company between 2005 and 2009. The charges Barber plead guilty to included the following felonies - conspiracy to commit bankruptcy fraud, conspiracy to commit bank fraud and money laundering. The maximum sentence for all charges is 45 years, with fines possibly maxing out at $1.5 million.

Following were the specific charges to which Barber admitted guilt.
• Conspiracy to Commit Bankruptcy Fraud
Beginning in April 2008 and continuing through Nov. 9, 2010, Barber reached an agreement with K. Vaughn Knight and James Van Doren to conceal and disguise income and funds belonging to Barber in order to hide those funds from creditors.

• Conspiracy to Commit Bank Fraud
From around Aug. 2008 to around Dec. 2008, barber conspired with Jeff Whorton, Brandon Rains, David Fisher and others to defraud First Federal Bank. The parties falsely and fraudulently represented the purchase prices of certain lots known as "Executive Plaza" to be higher than the actual sales prices in order to obtain higher loans from First Federal Bank.

• Money Laundering
Barber engaged in money laundering when he conducted monetary transaction of criminally derived property through a financial institution. …Barber had agreed with Van Doren and Knight to conceal certain income and transactions from the bankruptcy court.

PROSECUTION PUSH
U.S. Attorney (Western District of Arkansas) Conner Eldridge supports the U.S. Probation’s Office sentencing range request of 19.5 years to almost 24 and a half years in prison. The prison term is based on a fraud amount of more than $32.343 million, and because Barber was the “leader” of a conspiracy that involved others.

“The United States agrees with the Probation Office that the defendant should be assessed a two-level enhancement for acting as an organizer, supervisor, or leader in exercising decision-making authority and directing the activities of his co-conspirators,” Eldridge and Assistant U.S. Attorney Wendy Johnson noted in their July 23 sentencing memorandum. (Link here for a PDF of the memo.)

The $32 million loss was calculated, according to Eldridge and Johnson, with the following information.
• $9.901 million
Legacy Bank losses in the Legacy Condominiums transactions

• $7.608 million
Enterprise Bank loss in the Bellafont Retail transaction

• $5.293 million
First Federal Bank loss in the Outfield, Spring Creek and Executive Plaza real estate transactions

• $3.689 million
Todays Bank (formerly First State Bank of NWA) loss in fraudulent loans to Barber personally and Lynnkohn, an entity controlled by Barber, which was used in the Legacy Condominiums real estate project

• $2.395 million
Bank of Fayetteville loss in real estate loans to SCB Investments, and Metro District, in which Barber submitted false financial information

• $1.8 million
First State Bank of Lonoke loss in The Peaks Condos real estate transaction in which Barber submitted false financial information

• $1.655 million
Simmons First loss in the Metro District transactions

Eldridge has never hinted he would favor leniency in the Barber case. A July 31, 2013 statement from Eldridge following Barber’s admission of guilt noted: “This is a significant step in bringing several individuals involved in committing fraud, including fraud on the federal bankruptcy court, to justice. This case indicates that we are serious about identifying, investigating, and prosecuting those who perpetuate fraud, swindle others out of money, and engage in financial crimes.”

‘DOWNWARD DEPARTURES’
Through his attorneys, Asa Hutchinson and Asa Hutchinson III, Barber is hoping for leniency. The 50-page sentencing memo submitted by Hutchinson III, with Rogers-based The Asa Hutchinson Law Group, details why Barber’s sentence should be set at five years. Reasons for the “downward departures” from the sentencing range pushed by the prosecution include:
• Barber’s guilty plea and subsequent cooperation with government officials;
• Lesser amount of financial damage than is being alleged by the prosecution;
• A “more complete perspective” of Barber’s downfall and his life prior to committing fraud;
• His charitable contributions prior to committing fraud; and
• Comparison of “national sentencing statistics” that apply to the Barber case history.

As to the financial damage, Barber’s attorneys argue that the damage is less than $20 million instead of the more than $32.343 million argued by the prosecution.

LETTERS OF SUPPORT
The memo from Hutchinson III also includes several pages describing the more than 40 letters from people providing background as to Barber’s “contributions to the community, his love for family and his own character.” The letters are part of documents provided to the court by Barber’s attorneys.

“These are respected and accomplished leaders and citizens who do not excuse Brandon’s conduct but do offer unique and important perspectives to the Court,” Hutchinson III noted in the memo. “These individuals have very personally described their history with Barber and the contributions he has made in the lives of individuals, charitable organizations and community projects. The letters are not form letters but they personally describe a person who is caring, committed to his children and hard working.”

One letter is from Richard Hudson, the recently retired top lobbyist for the University of Arkansas. Hudson noted: “Had the national recession not occurred, I believe Brandon would today be a highly successful and well-respected business leader in Northwest Arkansas.”

The recession is also a mitigating factor. Hutchinson III wrote: “Brandon Barber fought hard to avoid bankruptcy, to land on his feet, to keep his businesses going and in the fighting he erred and committed the fraud. Because he tried too hard and because he cut corners in his fighting, he lost everything and in his struggles he caused financial harm to others as well.”

Hutchinson III also argued that national statistics show sentencing of first time, white collar criminals “is far below Mr. Barber’s advisory guideline range” and he requested the court take this into consideration.

Link here for the sentencing memo from Hutchinson III.

The Fort Smith Board of Directors dove into the region's economy and attempted to understand why the city has some of the highest numbers of households depending on welfare and other supplemental income and has some of the lowest number of households relying on earnings earned through employment.

According to a memo from City Administrator Ray Gosack, the study session topic came about as a result of a 2013 report from the college of business at the University of Arkansas at Fort Smith that compared "sources of household income in the Fort Smith region with the United States, Arkansas, Oklahoma, and the northwest Arkansas region."

The various sources of income, Gosack said, included earnings (wages, salaries, etc.), social security, retirement/pension, supplemental security (stipends to low income elderly, blind or disabled persons), cash public assistance and food stamp/SNAP benefits.

"The concern," Gosack wrote, "is that a smaller percentage of the Fort Smith population in the comparison group is participating in the workforce."

THE DEMOGRAPHICS
Dr. Kermit Kuehn, the UAFS College of Business's author of the report, explained some of the figures in depth and explained that in Fort Smith, 35% of the local population earns an income from Social Security while only 29% of the nation, 34.3% of Arkansas and 31.0% of Oklahoma does the same.

The number of people age 65 and older in Fort Smith is 12.7%, while the state as a whole has 14.4% of the population 65 and older and 14.1% of the national population is 65 or older. The study also showed that 19.7% of Fort Smith residents do not hold a high school diploma, compared with only 16.7% of Arkansas as a whole, 13.8% of Oklahoma and 14.3% of the nation.

When it comes to income, Fort Smith's median household income is $37,232 versus $40,531 across the state of Arkansas, $44,531 in Oklahoma and $53,046 nationally.

Kuehn's research, using figures from the Bureau of Labor Statistics, also shows that from January 2007 through January 2013, the total workforce declined in Fort Smith from 3.97% while the U.S. workforce has grown by 1.89% during the same period. By comparison, Arkansas' overall workforce only shrank 1.48% while Oklahoma's increased by 4.75% and the Northwest Arkansas region improved by 4.45%.

There were no simple answers to reversing the trends, he said, adding that the Fort Smith economic picture has been "consistent."

"The picture for Fort Smith has been very consistent. I did a study back in 2010 of similar characteristics of the community and that data revealed a pretty consistent picture of a community that tends to have lower income, the demographics tend to have lower education levels and thus a higher dependency on public support systems like you had mentioned Social Security, SNAP programs and these type of public assistance. You add to that the aging of the population and you begin to see fruits of that and the implications of that as far as the disposal income that becomes available as time goes on."

As a result of the lower incomes and dependence on public assistance, the entire economy suffers, Kuehn said.

"The net result is what you have is a population, a community that has probably less disposable income and probably will (continue declining) as aging of the population continues and boomers continue to retire and Social Security and disposable income decline," he said.

RECENT NUMBERS
A continued decline in the size of the workforce and the number of employed edged the Fort Smith metro jobless rate to 6.4% in June compared to 6.3% in May. The rate was lower than the 8.2% in June 2013, but the number of employed in the region fell 2.24% in the 12-month period.

The size of the Fort Smith regional workforce during June was 126,822, down slightly from 126,971 during May, and well below the 132,323 during June 2013, according to figures released by the U.S. Bureau of Labor Statistics. The labor force reached a revised high of 140,253 in June 2007, meaning the June workforce size is down 9.57% from the peak number.

The number of employed in the Fort Smith region totaled 118,751 in June, down from 118,929 in May, and an estimated 2,726 jobs below the 121,477 employed in June 2013.

Kuehn said losses of large manufacturers has also hurt because many employers now require additional skills, even in manufacturing, and some of the only real growth in the employment sector has been in hospitality (tourism), which he said are traditionally the lowest paying jobs and hardly fill the void created by some of the highest paying jobs lost from the exodus of manufacturers in Fort Smith.

COST OF JOBS
He said the costs of jobs — fuel to and from work, the cost of so-called "work" or professional clothing, babysitting costs, etc. — have in some cases disincentivized both adults in a home from working when the net benefit is only a few hundred dollars a month or less.

City Director George Catsavis asked Kuehn what the city could do in this "new frontier" to spur economic development in the absence of traditional manufacturing employment.

Kuehn said the city must focus on growth areas, pointing to the healthcare industry as a good place to start.

"One of the great things that is happening (economically is the expansion of) health services," he said. "I think we have at least one or two administrative centers here, handling or processing for regional or nationally for Golden Living and (the Shared Services Center). But in any case, these are great types of jobs that are white collar, tend to pay more than the typical service sector-type jobs. Additionally, we have two medical centers. Further, we have clinics that are going up all over the place. Further, we have a medical college that's coming. I think these are the making of a great… I'd call them clusters, meaning there's gaps in that cluster that could be the basis of emphasis on recruiting, a pursuit to do whatever to get those gaps filled. That's important for this kind of sector. And you have a different leg growing than just a manufacturing leg or hospitality-related jobs, which really don't go very far for very many people."

Catsavis also asked Kuehn's professional opinion about efforts to raise the Arkansas minimum wage to $8.50 within three years. In response, Kuehn said it would hurt the Arkansas economy, especially in Fort Smith where the overall income is lower.

He said adding income could result in companies furthering automation efforts to reduce payroll costs, leading to higher unemployment. In other areas, cuts may come in hourly workers' shifts coupled with increases in the cost of goods.

"There's always a payday. Nothing's ever free, it always works through and the consumer pays for that."

Voters went to the polls in Alma and Fort Smith on Tuesday (Aug. 12) to decide on a sales tax issue in the Crawford County city and a millage increase in Fort Smith, with mixed results. In Fort Smith, the two mil increase sought by the library's board of trustees went down by a vote of 64.02% against to 35.98% for the increase out of 4,343 votes cast.

Alma's attempt to get a one cent sales tax passed before the current one cent sales sunsets next month. A previous effort in the May primary to get a one cent sales tax passed ended up failing, leading to Tuesday's special election.

FORT SMITH LIBRARY
The millage question for the Fort Smith library would have raised the library's millage rate from one mil to three mils, which would have increased the library's operating budget by approximately $2.8 million.

The library's stated plan for the funding included improving technologies at the library, as well as adding a maker space and offering digital streaming services. Kiosks were also a possibility around the city, similar to red box but for books and other media.
www.thecitywire.com/node/33927

At the Windsor Street library branch Tuesday afternoon, Library Trustee Bettye J. Baker said the programs proposed were needed and said the library's board of trustees had not formulated a "Plan B" for tonight's election result.

"Not really," she said. "We're just so hopeful that it will pass. And we are so aware of the programs that we need and it would really hurt all of us."

Rebekah Walton, a past library trustee voting at the Windsor Street branch Tuesday, voted in favor of the increase because she believed the neighborhood expansion that occurred in the 1990s is tied to the millage vote Tuesday "and it's a work that still needs to be completed."

She said she expected the library to find another way to fund the programs proposed as a part of the millage election that failed Tuesday.

"The list had the necessaries, the not so necessaries, and the dream items to make the library what they really want it to be. So if it does not pass, which I doubt, I think the library will – they have such a broad base of support – they will find another avenue to have done what they need to get done."

Dewayne Roller was another voter at the Windsor branch who voted against the millage.

"I voted against it," he said. "Well, I think we pay too much in taxes right now. We need to get business back in Fort Smith because it looks to me like Fort Smith is going to become another Detroit. That's just my personal opinion."

Attempts to reach Fort Smith Public Library Executive Director Jennifer Goodson once the ballots were counted Tuesday were unsuccessful.

Should the library choose to vote on a millage increase, it may have to wait until after the general election in November, said Sebastian County Election Commission Chairman Lee Webb.

"The kicker is they would have to get the city to approve (an election) again and the deadline (to get on the November ballot) is in August for that. But I don't think they're planning (another election)."

ALMA SALES TAX
In Alma, the results were different with the city's one percent tax passing. The sales tax will support a variety of projects, each of which had to be voted on separately.

Following is the final tally of votes for the various capital improvement projects.
• Streets - 288 to 154;
• Fire Department - 296 to 151;
• Police Department - 291 to 156;
• Parks Department - 278/156;
• Downtown development - 270 to 177;
• Parking - 256 to 192; and
• Refinancing municipal bond debt - 280 to 161.

According to Crawford County Clerk Teresa Armer, the sales tax will sunset once all projects have been paid off in full.

The Fort Smith regional travel and tourism sector continues to post gains compared to 2013 based on hospitality tax collections in Fort Smith and Van Buren, with sector employment still a bright spot in the regional labor market.

Hospitality tax collections in Van Buren for the first six months of 2014 total $216,205, up 1.6% compared to the same period in 2013. The city collects a 1% tax on lodging and a 1% prepared food tax.

June receipts totaled $35,594, down 2.6. However, Maryl Koeth, executive director of the Van Buren Advertising & Promotion Commission, said a mailing error prevented a large collection from being entered in June. She said the June tally will be “slightly above” June 2013 when the check is received.

If the June collection is amended higher, the city will have enjoyed four consecutive months of gains. February was down 0.5%, but that followed a 4.2% increase in January collections.

Koeth said hotel activity is still better than the restaurant sector.

“We continue to see a slow increase in spending with lodging still seeing the bigger increase with a 3.5% increase in receipts over 2013. Restaurants are still below last year by half a percent, which is in keeping with the change we have seen over the last few years in consumer spending,” Koeth explained.

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.

FORT SMITH NUMBERS
For the first six months of 2014 the Fort Smith Convention & Visitors Bureau collected $377,375, up 1.8% compared to the same period of 2013. The city collects a 3% tax on lodging.

June hospitality tax collections in Fort Smith totaled $70,206, up 2.4% compared to June 2013.

Claude Legris, executive director of the Fort Smith Convention & Visitors Bureau, said an increase in occupancy and room rates helped push higher the June numbers.

“Increases in collections included Hampton Inn +6%; Homewood Suites by Hilton +8%; Residence Inn by Marriott +10% and Holiday Inn City Center +17%,” Legris wrote in an e-mail. “Holiday Inn showed growth in all market areas including teams for sporting events (swimming and softball tournaments), conferences in conjunction with Convention Center events, in-house conference bookings and corporate.”

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.

Employment in the region’s tourism industry was 9,600 during June, down from 9,700 in May and above the 9,400 in June 2013. The sector reached an employment high of 9,800 in August 2008.

ARKANSAS TOURISM BOOST
Collections of Arkansas’ 2% tourism tax during the first five months of 2014 totaled $5.284 million, up 6.6% compared to the $4.954 million during the same period of 2013.

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

Jim Benton and John McCutcheon, co-owners of PolyTech Plastic Molding in Prairie Grove, say they are living the dream since purchasing the plastic injection molding facility in mid 2012. It didn’t hurt that soon after they bought the business Bentonville-based Wal-Mart Stores announced an “onshoring” initiative to buy more U.S.-made goods.

This duo projects their little enterprise to do $20 million in sales by 2020, maybe before, given the growth expected in part from Wal-Mart’s U.S. manufacturing jobs program.

The long-time business tandem was schooled in manufacturing during more than a decade of work together at Pace Industries in Fayetteville — an aluminum die casting maker — where they worked in sales. They heard the PolyTech plant was for sale so on a slow afternoon they made the drive over to Prairie Grove to check out the possibilities.

It was love at first sight, according to McCutcheon, who said they could not believe how pristine and profitable this off-the-beaten-path plant was, securely tucked away in Prairie Grove’s modest industrial park.

“Former owner John Booth ran this company very well but he was ready to retire and agreed to sell it to us, financing the deal himself with the help of First Security Bank,” Benton said.

The small business was valued at roughly $7 million by an interested private equity firm,   shortly before Benton and McCutcheon cut their deal which allowed Booth to keep the ownership local.

“When we purchased this plant it was only running at 30% capacity and still profitable, which is unheard of in manufacturing. We knew there was a lot of opportunity to grow this business right away,” McCutcheon said.

THANKS, WAL-MART
Within three months of their purchasing the plant, Wal-Mart announced its U.S. manufacturing initiative which took the partners by complete surprise. In their first year of ownership the plant did $5.4 million in sales. 

McCutcheon said within a month of Wal-Mart’s announcement his phone began to ring almost daily from suppliers looking for ways to onshore plastics manufacturing from China.

“It’s been incredible. The business we have attracted related to the Wal-Mart push and we’re just getting started. We knew we could fill this plant up when we bought it, but it’s happening much faster than we first believed because of the Wal-Mart suppliers who want to make products in the U.S again,” said Benton.

“Thank you Wal-Mart,” McCutcheon said in all sincerity.

The 76,000 square-foot plant employs 46 people with 18 die casting machines and more than 300 dies. The company makes the dies in their tool shop that also provides maintenance for other local plastic molding facilities such as Clack and Preferred Line Products of Rogers who also contract with PolyTech for custom and difficult jobs.

“We have our own tool and die shop and prior to us purchasing the company about 55% of the company revenue came from maintenance and diagnostics services for other local shops,” Benton said.

Plant Manager Gaylene Deere is in the process of screening applications for a few more jobs (less than 10) that will be filled in the fourth quarter when production ramps up. The plant now runs six to seven days a week around the clock, and is at about 50% capacity.

Last year the company did $6 million in annual sales and is on pace to exceed $7 million this year, with a strong fourth quarter push, directly related to products that will end on Wal-Mart shelves. One aspect that Benton said sets PolyTech apart from other custom plastics operations is the $1.4 million of inventory kept on hand for their customers at all times. 

“When our customers want it they can have it right away. Most orders can be filled from the store room and then work to restock our storeroom. There is a cost in carrying inventory but it’s an invaluable service to our customers and they appreciate it,” Benton said.

This has been a real benefit to Wal-Mart suppliers who experts say typically needed nine months or more of lead production time when sourcing their products from China.

SUPPLIER WORK
Hot Springs-based Smith’s Products sells a wide variety of knife sharpeners and other products to retailers across the country, including Wal-Mart. All of the company’s plastics manufacturing – 92 separate parts for all their products – is now based in China. Following the Wal-Mart initiative, Smith’s approached PolyTech to do all of its jobs and envisions an entire section of the Prairie Grove plant being dedicated to its manufacturing needs, Benton said.

“We are retooling right now to begin running Smiths products for Wal-Mart next month. Right now Smith’s sells 400,000 of the small knife sharpeners per month in Wal-Mart. They also sell 200,000 of the larger version per month. We will be making these products in-house and packaging them for retail sale,” McCutcheon said.

Burt Hanna, owner of Hanna’s Candles, is a long-time supplier of Wal-Mart Stores and recently contracted with PolyTech to manufacture 3.5 million candle jar lids because he wants to keep the business in Arkansas if possible.

Hugh Jarratt’s taco plate invention and the recent one million unit order from Wal-Mart Stores is another local example of new business for PolyTech Plastics. Jarratt told The City Wire that he wouldn’t have a business without PolyTech who has handled all of his manufacturing, shipping and replenishment from nearly day 1.

Jarratt’s big order came during Wal-Mart’s recent Open Call held in Bentonville. The retailer has promised to make other order announcements conducted at Open Call during its U.S. Manufacturing Jobs Summit in Denver over the next two days
(Aug. 14-15). During this conference The City Wire will report on any updates in U.S. job creation from this initiative.

STARS ALIGN
“We attended a plastics summit in Florida last year and every expert there said the plastics industry is fleeing China and anyone who plans on surviving will need to get out by mid 2015. We were working in aluminum casting in 2002 when we watched the exodus of plastics to China,” Benton said.

Bill Simon, outgoing CEO of Walmart U.S., said in August of last year that the “stars were aligning for U.S. manufacturing jobs to be onshored.” Inflationary labor costs in China, long lead times for production and rising transportation costs have neutralized the benefits of manufacturing plastics and other non-labor intensive products abroad.

“It wasn’t the plastics industry itself that needed to off-shore, but it was the labor intensive assembly up the supply chain that forced the movement,” Benton said.

McCutcheon and Benton said they are convinced the Wal-Mart U.S. manufacturing push will eventually move the needle for stable manufacturing jobs in the U.S. They agree it won’t happen in a year or two, but it will in time as industries re-cluster into manufacturing centers in the U.S. 

Grant Tennille, director of the Arkansas Economic Development Commission, told The City Wire that plastics injection molding is one of the promising sectors for new growth in the Natural State. He said Northwest Arkansas and surrounding counties south, and east are already seeing active growth.

DREAM MAKER
While the Wal-Mart supplier business is the fastest growing segment for PolyTech, the company has a diverse client base as a custom manufacturer. 

“We just completed a job for Tyson Foods. They are new client and part of $2 million in new business we have added this past year,” Benton said.

PolyTech also does work for Rheem and York for HVAC parts and components, some of which are proprietary pieces from business the plant has been making for more than a decade. Nautilus also is a long-time client of the company as is A.G. Russell Knives. PolyTech also makes pieces for Defense Department suppliers which help to stabilize the missiles as they are packed into canisters. They also make trip wire spools at a rate of 10,000 per month and plastic guards that attach to tank tracks to make them road safe.

“Of the coolest parts of our job is meeting with all the inventors who find us on the Internet and want us to help them make their product, realize their own dream,” Benton said.

He said many times the inventor comes in with an idea, maybe a sketch, never a prototype, most always just an idea or vague concept.

“Our engineer works with them to come up with a design concept. We can print that on our 3-D printer and from there our team can build the dies needed to manufacture the product,” Benton said.

One of those product ideas is now “Paint Handy,” which is a painter’s tool sold now on QVC but hopefully in select retailers at some point, McCutcheon said.

The Christmas Tree Screen is a new product PolyTech is making for an inventor from Joplin, Mo. The plastic screen affixes to the bottom of a Christmas tree to keep cats from climbing the tree. 

“We never know who is going to call or show up and need our help. It’s been really fun to see some of these inventions take off like Jarratt’s taco plate,” Benton said.

Mercy Fort Smith's Hembree Mercy Cancer Center showed off improvements at its long-time facility Tuesday (Aug. 13), including some of the most expensive equipment ever purchased by the medical center that it said would benefit patients who previously were commuting to Northwest Arkansas or Tulsa for certain treatments.

The $5.1 million expansion and renovation of the radiation oncology department inside the cancer center included the purchase of a Varian TrueBeam STx linear accelerator at a cost of nearly $3 million, according to Mercy President Ryan Gehrig. The clinic also added a Varian GammaMed Plus high dose rate brachytherapy unit for treatment of certain types of breast and gynecologic cancers.

The funding, provided by Gerdau, the Hennessy Foundation and First National Bank of Fort Smith, also supported a renovation of the cancer center's lobby and the addition of a patient resource library. The lobby renovation was its first since opening in 1994.

Summer Bonner, the center's lead radiation therapist, explained that the new TrueBeam machine will allow medical staffers at Mercy to better pinpoint treatments and avoid unnecessary damage to nerves, blood vessels or other parts of the body. The pinpointing is allowed because of the device's built-in CT scanner.

"In the past, skid marks and marks on the mask are what we also used to treat patients. Unfortunately when you do that, if you don't have imaging equipment, you have to go with a larger margin because you don't want to miss anything that could be cancerous. It was really important that you include everything. Now we've got this technology, we've been able to shrink our margins and use different types of treatments."

Gehrig explained that the new devices could offer treatments in Fort Smith that previously required travel to other regions like Northwest Arkansas or Tulsa. Bonner explained one of the treatments now available with the TrueBeam device.

"(One of the new treatments available is) intensity-modulated radiation therapy," she said. "That means we can give that tumor a much higher dose and we can spare normal tissue. So now we've got all these imaging techniques and imaging quality, we can use those techniques to treat our patients better and hopefully relieve some of the side affects that they had experienced from the radiation therapy."

Bonner said the new TrueBeam is so accurate, it can treat a tumor with "submillimetric accuracies."

"In the past, we didn't have that capability," she added.

Jayme Gaucher, a radiation therapist at Hembree Mercy Center Center, explained that the addition of the GammaMed Plus device that administers high doses of brachytherapy allows the patients to receive radiation treatments internally through a catheter versus the external radiation administered by the TrueBeam device.

"So we attach it to a catheter, which is attached to a cylinder or something that is inserted in the patient, and it delivers it directly to the tumor or the area where the tumor was," she said.

Gaucher said the device is mainly used for gynecologic cancers and breast cancers and can be combined with external treatments.

"If they get the two together, then they'll get about 30 or so treatments with the external beam radiation and then afterwards, they'll come for maybe three treatments with the HDR (high dose rate). If it's used as their primary treatment, then they only have to have maybe about five. Somewhere in that range. So it's a real short course if it's just this."

The device is the only one of its kind in Fort Smith, Gaucher said, reducing travel time and expense for patients needing the specific type of treatment provided by the HDR machine.

The final addition to the updated cancer center is the patient resource library to the right of the center's entrance, which features materials on treatments, medical information and a computer with Internet access. In the library is an work of art by Little Rock artist Guy Bell entitled "First Light."

According to Traci Webb, director of oncology services, the inclusion of the art is intended to be inspirational for patients experiencing exceptionally difficult challenges as they fight cancer.

"There are analogies that compare a cancer patient's journey to the path of the sun," she said. "Before diagnosis, the patient typically starts their cancer battle doing okay, the sun's still out and things seem somewhat optimistic. As the sun goes down and night falls, much like the time of diagnosis and throughout care, things become darker and more difficult. The sunrise in the morning symbolizes the ending of the cancer patient's treatment. As they sun rises, there is renewed hope and motivation to continue on. We worked very hard to symbolize sunrise instead of sunset by focusing on cool tones of color."

As part of the expansion of the cancer center, Gehrig said the hospital has hired an additional oncologist and would hire more as patient demand required.

He said an exciting feature that would benefit Fort Smith residents is the possibility of specialists being able to treat patients remotely through the new Mercy virtual care center under construction in Chesterfield, Mo.

"You know there could be some specialist services that maybe Fort Smith can't support by itself, but you pool into a larger group that (makes it economically viable). … At this point, I don't know of any specific examples. But it could (come). And all of that is being explored and developed as we speak."

Images that appeared on Facebook this week show a Ben Geren Aquatics Center that is no longer a pile of dirt, but instead something that resembles a set of pools. The images, posted by MAHG Architecture, show a wave pool that has poured concrete in it, as well as the outline of what will eventually be a lazy river and a kids play area.

Sebastian County Judge David Hudson said even with the amount of rain this summer, construction is still on schedule.

"It's been an unusual summer," he said. "But things are moving forward in an orderly fashion overall with the project. And we'll plan on organizing a tour that will have the two governmental entities and the media sometime within the next few weeks. Whenever things look further along, it will make for an interesting tour."

The project took another step forward Wednesday (Aug. 13) with the opening of four bids for the following items (each item received only one bid):
• Earthwork - $67,880 by Harris Fort Smith;
• Construction of shade structures and a concession area - $260,700 by Play by Design; an alternate fourth shade structure was quoted at $19,800;
• Concrete work on the entry driveway - $421,460 by Steve Beam Construction; and
• Audio systems by Matlock Electric at $11,584.

In all, the four bids totaled $762,624 not counting the possible additional shade structure. Hudson said the bids were enhancements possible since parts of the aquatics center have collectively come in nearly $1 million below budget.

"Our goal is to try and enhance the project," Hudson said, though he said is was not yet determined if the project would come in right at the nearly $11 million budgeted for the project by the city of Fort Smith and Sebastian County. "So we'll evaluate those bids and determine what our next step will be in the project."

While construction work continues, Fort Smith Parks and Recreation Director Mike Alsup said three companies are under consideration for a possible management contract with the governments to run the water park.

The companies include ARM (American Resort Management), USA Pools Inc. and AmusementAquatic Management Group. The latter is headed by Kent Lemasters, who previously advocated to the governments during a joint meeting for the inclusion of the wave pool concept. Lemasters had advocated for the inclusion, but in e-mails never shared with the Board of Directors or the Quorum Court he expressed an opinion that the estimated costs for the project were too high. He said the water park could be built for between $6 million and $8 million, including a wave pool.

Alsup said interviews with the management groups were "going well," with Hudson adding that he hoped to have a deal hammered out before the end of the year if the governments ultimately decide to allow an outside firm to manage the facility.

"That's probably 75% of the way through," Hudson said of interviews and selection of a management company. "You know, we're getting close to coming up with something that we can talk with both governmental entities about. But that's not complete. But updating, that's going to involve a couple steps. One of them is updating the original business plan as a part of Ballard King as that consultant. The other one is what Mike has been coordinating, and that's sending out requests for qualifications. We've had interviews and we're narrowing down possible management companies. So that's in process.

"…(It'll) be in the last quarter of this year. We're doing it as quickly as we can. It's just a matter of working through the process in a responsible fashion. We know that we need to… The quicker we get an action plan so we can start acting on some of the decisions that need to be made, the better."

Still left to be bid are landscaping and signage for the aquatics center, as well as flooring that did not receive any bids on Wednesday.

But with the earth starting to resemble pools and rivers at the site, Hudson said it would just be a matter of time before commuters in south Fort Smith start noticing various components of the aquatics center popping up out of the ground.

As for when the aquatics center will resemble a facility full of slides and visible from the street, Alsup said it will still be a bit of time, adding that concessions and other facilities will rise first.

"I think they (slides) come toward the end of the project because they're working from the entry building to the back. So you probably won't see the slides until later in the project."

The Ben Geren Aquatics Center is scheduled to open Memorial Day 2015.

Reforming the state’s workforce education system is the single most-important issue in economic development, Chris Masingill, director of the Delta Regional Authority, said Wednesday at a DRA-sponsored summit that brought together leaders of the business community, educators and officeholders at the University of Arkansas at Pine Bluff for a wide-ranging, daylong discussion of how Arkansas trains its workers.

Arkansas must seize the opportunity while it exists, Masingill said. “We’ve got 10 years to capture re-shoring, right-shoring” of jobs that were moved overseas, he said. In order to do so, he said, “We need fundamental, holistic change in our system.”

The summit, one of eight state-specific meetings conducted in the Mississippi River Delta states, used Re-imagining Workforce Development, a report produced in 2013 by the Southern Growth Policies Board, and updated in July and August of this year.

Report co-author Linda Hoke of Durham, N.C., told attendees that “the rate of change has accelerated in the world,” and therefore education must adapt to meet the needs.
States should promote alternative partnerships in education and business must play a key role in designing the education and training needed to fill current and future jobs and success “requires a system approach,” she said.

To be competitive in the global environment, the report said the Delta region must re-imagine workforce preparation in three key areas: re-imagining readiness, re-engaging adult learners and disconnected youth, and re-aligning relationships and resources. Key actions for re-imagining readiness include strengthening the connection between education and job skills, re-thinking credentials and their value in the workplace and giving students more exposure to the world of work.

More than two-thirds of the workforce in 2020 and nearly half of the workforce in 2030 are already working today, while at the same time, more than one in seven young people age 18-24 are neither working nor in school, the report noted.

In order to re-engage both adults and youths in the education system to update their skills to meet the need for a trained and educated workforce in the future, the system should target workers with some credits with no degree or credential, help dislocated workers rejoin the workforce and recover disconnected youth, DRA said.

The Delta must better align education, workforce and economic development assets to create clear pathways and smooth transitions to facilitate lifelong learning, according to the report. Key actions in that regard include creating continuity in education and workforce development from early childhood through career paths; aligning and tracking data across the educational and workforce pipeline; and engaging business in a meaningful way.

And, Hoke said, there should be a “fourth R” along with the three Rs of re-imagine, re-engage and realign. That fourth R, she said is “Ramp up.” Rather than seek more innovation, “we need to scale them up. We don’t have to re-invent the wheel.”

How Arkansas reforms its workforce education efforts “will define … the shape of the Arkansas economy for the next 20 to 30 years,” said Randy Zook, president of the Arkansas State Chamber of Commerce/Associated Industries of Arkansas. “We’re spending plenty of money. We’ve just got to spend it in the right way.”

The daylong conference where the updated report was revealed also included gubernatorial candidates, Republican Asa Hutchinson and Democrat Mike Ross. Both candidates touted their jobs and workforce education platforms.

A largely new leadership team at Wal-Mart Stores is focused on better store execution from Bentonville to Shanghai. That was the message shared by execs with the retail giant in its second quarter earnings call  on Thursday (Aug. 14).

Wal-Mart Stores reported fiscal second quarter net income of $4.093 billion, or $1.21 per share. The earnings were deemed respectable by analysts matched the consensus estimate of $1.21 per share. The retailer’s quarterly revenue of $120.125 billion beat the consensus estimate of $119 billion.

On a cautionary note, the company also lowered its full year earnings guidance from a range of $5.10-$5.45 per share to $4.90-$5.15 per share based on higher than expected healthcare costs and “incremental investments” in its e-commerce segments.

Budd Bugatch, analyst with Raymond James & Associates, said Wall Street often frowns on guidance lowering, but in this case higher a higher expense of $500 million for healthcare costs year-over-year and continued investment in e-commerce are far more palatable than hearing consumers are staying way.

Wal-Mart also spent approximately $31 million for the ongoing Federal Corrupt Practices Act inquires and investigations, and $12 million related to Wal-Mart’s global compliance program and organizational enhancements.

Also in the quarter, Wal-Mart said consolidated inventory increased 6.2%, in part because of the new store ramp up coming in back half of the year. That said, Wal-Mart execs vowed to bring the number down to more manageable levels. The retailer showed cumulative inventory totaling $45.451 billion in the quarter, up by more $2 billion in the past year and $593 million more than reported in the first quarter.

Same-store comparable sales during the quarter were flat at Walmart U.S. and at Sam’s Club. Walmart U.S. same-store traffic was down 1.1% with the average ticket price up 1.1%. This included a .70% negative impact from lost SNAP sales in the quarter. At Sam’s Club, the traffic was up 0.3% and the average ticket was down 0.3%.

“I’m pleased with our solid earnings per share performance,” Doug McMillon, Wal-Mart Stores president and CEO, said in the earnings report. “As it relates to the positives from the quarter, I’m encouraged by the performance of our International business, our Neighborhood Market sales in the U.S. and by our e-commerce growth. As it relates to our challenges in the quarter, we wanted to see stronger comps in Walmart U.S. and Sam’s Club, but both reported flat comp sales. Stronger sales in the U.S. businesses would’ve also helped our profit performance.”

The quarterly income of $4.093 billion was just slightly better than the $4.069 billion in the same period of 2013. Total revenue of $120.125 billion was up 2.82% compared to the same quarter of 2013.

For Wal-Mart’s first six fiscal months, net income was $7.686 billion, down from the $7.853 billion in the same period of 2013. Total revenue in the six-months is $235.085 billion, up 1.8% compared to the same 2013 period.

The company said e-commerce sales helped comparable sales by 0.3%. Such sales include online purchases that are picked up by the customer at a store site.

“Our investments in e-commerce and mobile are very important, as the lines between digital and physical retail continue to blur. Our customers expect a seamless experience, and we’re working to deliver that for them around the world,” McMillon said in the statement.

U.S. GAME PLAN
Walmart U.S. reported net sales of $70.601 billion in the quarter, up 2.7% from $69.728 billion in the year-ago period.

“My initial efforts will focus on the core. We will deliver against these key customer requirements: being in stock, clean stores, the right price, the right items, improved service, better productivity,” said Greg Foran, who took over as Walmart U.S. CEO on Aug. 9. “I will be out in stores hearing directly from our customers and our associates and tracking our performance. I’m a competitive person, so I will be visiting the market place as well. We will look to build momentum.”

With Walmart U.S. representing roughly 60% of the company’s total sales, turning this segment around is a major priority to reverse six consecutive quarters of sagging results amid weaker traffic patterns as more sales shift online. Wal-Mart has been adamant that closing underperforming stores is not part of its strategy to right the ship. Chief Financial Officer Charles Holley said during the media call that supercenters still have one of the highest returns of all of the store formats and its makes no sense to shutter stores that are profitable.

Burt Flickinger, a partner with Strategic Resource Group, said Wal-Mart has suffered from not having the right leadership spread across its global enterprise.

“The U.S. segment has been struggling for sometime amid top managers with little operational expertise,” he said, adding that their logistics and financial backgrounds are  impressive but operational execution is a different matter.

McMillon is an operator and merchant at heart and has of late assembled a new cast around him with diverse operational expertise. Wall Street is watching to see what impact this new team will have on bottomline results.

SMALLER STORE PUSH
It’s apparent from Wal-Mart’s report that consumers are choosing to shop the smaller formats as Neighborhood Market reported comp sales of 5.6% in the quarter, while comp traffic rose 4.1%.

Analysts continue to ask Wal-Mart how much this smaller format expansion is hindering sales at neighboring supercenters. Wal-Mart has said it’s not concerned about cannibalization of supercenter sales, because its research shows the format is still valued for stock-up trips — a $585 billion annual market, of which it owns 60%.

The smaller format rollout is aimed to capture a larger share of the $415 billion annual quick-trip market, with 40% of that spend on grocery. Wal-Mart estimates its share of the quick-trip market at just 10%.

Wal-Mart opened 22 Neighborhood Markets during the second quarter and remains on track to open 180 to 200 new stores for the year. Additionally, The retailer said it continues to learn from its Walmart Express format test and has seen continued solid comp sales performance. 

“We’ll continue to roll out this phase of our test, with approximately 90 stores expected to open this fiscal year,” Foran noted in the call.

Another trend Walmart U.S. continues to confront is more consumers shopping online. 

Jan Kniffen of Kniffen Worldwide said as more people buy more products online physical stores and shopping malls will be hurt. He applauds Wal-Mart, the second largest e-commerce retailer next to Amazon, for continued investments it’s making in e-commerce in using stores as delivery options.

“Those brick and mortar stores that figure out how to leverage their physical assets to meet digital demand will be the winners,” Kniffen said.

Wal-Mart is doing just that. The retailer said 20 more supercenters became online fulfillment options in the quarter, and 20% of Wal-Mart’s online orders are now filled by supercenters.

“Our algorithms are helping to determine the optimal shipping point, whether from an online fulfillment center, a store distribution center or a store,” said Neil Ashe, CEO of Walmart Global E-Commerce.

Stacy Widlitz, a CNBC retail contributor, said it will take more time for Wal-Mart’s small store rollout to have a meaningful impact on overall results when so many of the retailer’s stores are supercenters. She said Wal-Mart is moving in the right direction, and the comps at the small store level are good, as are the online sales. She said they’re just not enough to combat the lukewarm results of the massive supercenter fleet.

SAM’S CLUB
Sam’s Club reported total net sales of $14.863 billion in the quarter, up 2.3% from a year ago. Gross profit rate was dinged .50% in the quarter nearly half of which related to investments in the new cash rewards program

“Our top priority at Sam’s Club remains growth – growing our member base and growing sales,” said Rosalind Brewer, Sam’s Club president and CEO. “We’re taking steps to increase the value of membership through investments in Plus member cash rewards and the cash back Mastercard. It’s still early, but member response has been positive.”

Membership and other income grew 10.5%, driven by upgrades and Plus renewals. Brewer said Sam’s launched late in the quarter a social media initiative to drive new membership growth. 

“We had almost 130,000 people respond to the offer, which ran from July 21 to August 1. While the majority of the offer redemptions will cross into the third quarter, we have been pleased by the number of new members who have already come into the club to officially activate their memberships,” Brewer said.

Like Wal-Mart, inventory management is a concern at Sam’s Club with inventory rising 4.7% in the quarter. Brewer said new clubs and an earlier set for fall seasonal merchandise contributed to the inventory uptick.

Brewer said the pets and laundry categories struggled in the quarter, which prompted some transitioning toward better pack-size values. The challenging electronics category is starting to improve despite comp sales weakness in wireless.

INTERNATIONAL GROWTH
The Walmart International division lead the company in sales growth percentage in the quarter, despite a challenging global economy. International sales totaled $33.872 billion, up 3.1% from the year-ago period. Excluding the impact of currency exchange rate fluctuations, Walmart International’s net sales for the quarter would have been $34.6 billion, an increase of 5.3% over last year. Currency exchange rate fluctuations negatively impacted net sales by $696 million during the quarter.

Operating income for the segment rose 8% to 1.489 billion.

“We remain focused on price investment across all our markets and expect to continue driving improved comp performance,” said David Cheesewright, Walmart International president and CEO. “I am pleased with the trends in many of our markets, which were driven by a continued focus on being the lowest cost operator.”

He said the global economy remains challenged, which means the customer is also stretched. Price remains a critical factor in our customer’s buying decisions. 

“During a recent visit to Chile, I saw first-hand how important price is to our customers. Just a year ago, Walmart Chile rolled out a mobile app, which allows customers to compare prices between Walmart and competitors. We had almost 200,000 item scans in this quarter alone. We believe innovations like this and price position will continue to set us apart in the market place,” Cheesewright said.

The United Kingdom posted comp sales of 2%, while traffic increased 1.7% and average ticket sales rose 0.3%. While net sales rose 2.2%, gross profit declined as Cheesewright said it faced aggressive price pressure from competitors.

Walmex reported comp sales growth of 1.9% on declining traffic but a 2.1% higher ticket spend. Overall net sales rose 5% in this large segment.

Mexico grew sales by 5.4% with comp sales improving 1.2%, related to Easter sales and strong growth in the self-serve formats. Sam’s has struggled in Mexico so much that the retailer recently announced management changes. Todd Harbaugh, who has more than 20 years of experience with Walmart, including 11 years in the Sam’s Club U.S. business, took over leadership of the club business. The merchandising division for Sam’s Club in Mexico was restructured into two areas, grocery and general merchandise, both with new leadership. 

“Our team is laying the groundwork for a more aggressive strategy to win back members and acquire new ones. We expect continued near-term challenges, but improvement in the longer term,” Cheesewright said.

Canada remains weak for retailers in general. Walmart Canada reported total sales decline 0.2% with 1.1% decline in traffic offset by a 1.3% higher average ticket.

In Brazil, Walmart posted a stellar 9.7% comp sales gain, but traffic was flat and the entire increase was in average ticket spend. Walmart said much of the gain was linked to food, general merchandise and consumable sales driven by the World Cup.

In China, Walmart saw comp sales slide 1.6%, while traffic fell 7.9%, offset by a 6.3% in average ticket spend. Net sales were up 1.1% in China in the quarter.

“We continue to face significant headwinds from government austerity programs, as well as price deflation in some key categories,” Cheesewright said.

The steep traffic decline was impacted by a new home delivery service in 383 stores. Cheesewright said the average ticket for delivery was significantly higher than the average store visit for the quarter.

Wal-Mart shares (NYSE: WMT) held their own following the earnings announcement with trading at $74.15, up 12 cents in Thursday’s morning session. During the past 52 weeks the share price has ranged from an $81.37 high to a $71.51 low.

Delta Plastics and a consortium of agricultural interests in Arkansas launched a new water conservation software initiative that leaders say could reduce water usage by 20% by the year 2020.

“This initiative is the most important conservation effort we have ever launched,” said Dhu Thompson, Delta Plastics chairman. “‘Preserving our farmland’ has been our company slogan for nearly 20 years. But conservation and sustainability is so much more than a slogan for us. It is a principle that has driven every major operational decision that we have made.”

The effort will provide irrigation management software to farmers at no charge through a user-friendly, web-based application designed to help farmers create more efficient pipe irrigation of crops.

The free program allows for computer-precision distribution of water through irrigation pipes more evenly, thus saving money from wasted run-off water. The software, called Pipe Planner, was designed more than 20 years ago and called “Faucet” at the time, Thompson said, but it was not user-friendly. Thompson said he contacted the developers and over the last four years has worked to simplify the interface to allow more widespread usage.

Thompson also said that after spending millions of private dollars to redevelop the product, he determined it should be offered for free in order to promote its widespread usage and benefits.

Delta Plastics estimates average water savings of 25-50% in addition to an average 25% reduction in energy costs when using Pipe Planner. Thompson said based on experiments with the software, he estimates that farmers in the Delta could “save more than one trillion gallons of water per year.”

Delta Plastics is the largest recycler of plastics in Arkansas, recycling more than one billion pounds of waste annually across the Delta.

STAKEHOLDERS
A large consortium of stakeholders will help educate farmers and other interested parties on the benefits of the Pipe Planner software.

The Delta Plastics H2O Initiative will:
Create a public/private partnership between Delta Plastics and the University of Arkansas Division of Agriculture, Mississippi State University, and other universities in the region of the Mississippi Delta;

Host educational forums for farmers, university extension agents, and private consultants focused on Pipe Planner implementation; and

Allow participants to collaborate on the most efficient water use practices.

“Agriculture has been working tirelessly to contribute efficiencies and new conservation practices to ensure the long-term availability of our natural resources. With the H2O Initiative, we’re pushing even farther in those efforts,” said Arkansas Farm Bureau Executive Vice-president Rodney Baker.

Other stakeholders include:
Agricultural Council of Arkansas
Arkansas Agriculture Department
Arkansas Association of Conservation Districts
Arkansas Farm Bureau
Arkansas Rice Federation
Arkansas Natural Resources Commission (ANRC)
Arkansas Corn and Grain Sorghum Promotion Board
Arkansas Cotton Council
Arkansas Soybean Promotion Board
AgHeritage Farm Credit Services
Bayou Meto Irrigation District
Delta Council/Delta F.A.R.M.
Ducks Unlimited
Louisiana Cotton and Grain
Mid-South Soybean Board (AR/LA/TX/MO/MS)
Mississippi State University
Natural Resources Conservation Service (AR)
Natural Resources Conservation Service (MS)
Natural Soybean and Grain Alliance
The Nature Conservancy
Tri-State Soybean Forum (AR/LA/MS)
United Sorghum Checkoff Program
University of Arkansas Division of Agriculture

Senators Keith Ingram, D-West Memphis, and Jimmy Hickey, Jr., R-Texarkana, will lead a bipartisan effort to abolish the office of lieutenant governor when the legislature convenes in January.

The move will require the approval of voters through a new constitutional amendment. The legislature may refer up to three proposed amendments during each regular session, and Ingram and Hickey said they intend to do so when the 90th General Assembly convenes in January.

“The office is a vestige of the early 19th century, before telephones were common and before computer technology was ever dreamed of,” Ingram said. “Under the Arkansas constitution the lieutenant governor’s only duty is to preside over the Senate and to serve as acting governor when the governor is out of state or unable to discharge the powers of the office.”

“A conservative estimate is that approval of this amendment would save Arkansas taxpayers about $450,000 a year,” Hickey said.

Senators Ingram and Hickey plan to co-sponsor a Senate Joint Resolution, which if adopted by the legislature would refer to the November 2016, general election ballot a proposed constitutional amendment abolishing the office of lieutenant governor as of Jan. 1, 2019.

There would be no statewide election for the office in 2018. The winner of this year’s contested election for lieutenant governor still would be able to serve out the full four-year term to which he is elected in November. The office is now vacant due to the resignation of former Lt. Governor Mark Darr (R), who left the office earlier this year after admitting to ethics violations.

DETAILS
Under Ingram’s and Hickey’s proposal if the governor resigned or was unable to fulfill the duties of the office due to ill health or impeachment, the state attorney general would assume the duties of governor and vacate the office of attorney general. There would then be a special election to elect a replacement for the attorney general, although the General Assembly could pass laws foregoing an election if fewer than six months remained before the position was to be filled by election.

The Attorney General assuming the office of Governor would appoint a temporary replacement for attorney general who would be ineligible to run for re-election in either a special or general election following his or her appointment.

If the governor left the state, he or she may designate the attorney general to serve as acting governor. If both the governor and attorney general are out of state, the President of the Senate shall be acting governor in their absence. If the Senate President is also out of state, the Speaker of the House would be acting governor.

Under Ingram’s and Hickey’s proposal, the line of succession would be similar to what is in the constitution now, except that the attorney general would replace the lieutenant governor.

“There are many pressing needs for the revenue now being spent on the office of lieutenant governor. People want us to streamline government, and this is a great way to do it,” Ingram said.

Hickey said that he and Ingram were announcing their plan well in advance of the legislative session so that there would be sufficient opportunity to answer any questions the people have.

“I’m confident that when voters are informed about the issue they will be willing to abolish the office,” Hickey said. “I’ve gotten a lot of support for this proposal from people in both political parties, so I’m encouraged.”

Property within and near a once dying Fort Smith mall is once again getting another injection of capital and jobs.

The former Phoenix Village Mall was purchased in January 2009 by Fort Smith-based FSM Redevelopment Partners and transformed into a site that now boasts more than 1,100 employees with various businesses and tens of millions of dollars in payroll.

According to FSM Redevelopment manager Lance Beaty, the company plans to invest in transforming additional square footage across the street from what is now the Shared Services Center that services Sparks Hospital and its corporate cousins owned by Community Health Systems.

"We are in the process of doing our plans for additional construction and development at that site," he said. "That would include development of the two parcels at Phoenix and Towson, as well as a tract across from our site on Phoenix. We are in the process of cutting that out and designing the refurbishment of that project."

The building being refurbished is across Phoenix from the Shared Services Center (the former Phoenix Expo Center) and will eventually house Beaty's RSVP Event Rentals Business. RSVP grew out of the Expo Center that was closed when the Services Center leased the Expo space.

The move allows RSVP to house the showroom, office and warehouse storage facility in one location versus its current situation which includes some off-site storage, Beaty said. In all, the new facility will have about 22,000 square feet of space, "so we'll take a significant portion of it to expand that operation."

EXTERIOR WORK PLANNED
Plans also call for development of the remaining 172,000 square feet of space at the former mall, which is 45% occupied by tenants including the Shared Services Center and Sykes' inbound call center that provides services for a financial company. Beaty said beyond finalizing plans for the final 172,000 square feet of space, he and his partners also are working on improvements to the exterior of the site.

"We are designing parking lot improvements, landscape improvements and buffers across the 14 acres of parking that we have," he said. "It's 14 acres, or some 1,700 spaces."

In all, Beaty said FSM Redevelopment Partners would likely spend about $5 million on the improvements to the site.

"You have to take into consideration that we'll be developing buildings in the two out parcels and $1 million on parking and landscaping," he said. "It doesn't take long (to see the numbers add up). But we've got some tenants who have made long-term commitments, so we want to make it what it should be."

Among those is the Shared Services Center, which was projected to have a $21.5 million payroll after opening and has maxed out the space it has leased from FSM Redevelopment, according to Beaty.

"I think we built that out for 650 cubicles, if I'm not mistaken. And I think they're at capacity with the number of work stations they've installed," he said.

As a result of the size of the Shared Services Center, Beaty said other businesses are starting to be attracted to the retail space available on-site.

"It drives the need for additional services from dry cleaners to convenience stores. We're starting to see that now. It's taken some time, but we're starting to see it."

NEW SERVICE CENTER, SYKES JOBS
Shannon White, vice president of Community Health Systems — the parent company of Sparks Health System and the Shared Services Center — said in an e-mail that the company was planning for expansion in the near future.

"Approximately 475 employees provide such specialized services as patient pre-registration, insurance verification, billing and insurance follow-up. We have a great group working at the SSC and have maintained a turnover rate that is significantly lower than the national industry standard. We have added employees this year and expect to continue growing our employee base with the potential to add 100 or more jobs over the next 18 months."

She said having the space Beaty described has enabled the company to continue growth at its new location.

"We are fortunate to have space within our location that can accommodate a significant expansion," White said.

The other large tenant at the former mall site, Sykes Enterprises, is also experiencing an expansion of its operations, according to Director of Operations Chris Melton.

"We do have some growth from the end of last year of 250 employees to now over 600 and will be at 750 plus at the end of the year," he said. "We've had some substantial growth in 2014."

When the company originally opened its Fort Smith facility in May 2011, it was a small operation performing work for an unnamed financial services company. Since that time, Melton said Sykes has been servicing three "separate verticals in Fort Smith." Verticals, he said, could also be known as lines of business.

To accommodate the growth, he said Skyes has expanded from 40,000 square feet to more than 60,000 square feet and expect to use the additional space to house more employees next year.

"I'd say that we'll be shooting for 1,000 plus employees," he said, meaning the site could add more than 250 employees in 2015.

With the Shared Services Center and Sykes nearing capacity within each company's leased facilities, Beaty said it was the right time to start planning and developing the expansion.

But he said a timeline for completing his $5 million in improvements will still depend on the business environment.

"It's driven by business and general economic circumstances," he said, "but (it is) planned for completion in the next 18 months."

Wal-Mart has leveraged its massive size and scale over the past 18 months to woo more suppliers into onshoring product manufacturing. The retailer says it’s just getting started, but is ready to make more progress during its U.S. Manufacturing Jobs Summit in Denver held Aug. 14-15.

It’s been 18 months since Wal-Mart pledged to invest an additional $250 billion in products made in America over the next decade. To date Wal-Mart confirmed with The City Wire that its product spending toward the goal is ahead of projections. The retailer said more definitive numbers would likely be given in its annual sustainability report.

“We will continue to lead on U.S. manufacturing. ... We have drawn a deeper understanding of the challenges that stand in the way from the work already done,” said Michelle Gloeckler, Walmart’s executive president of consumables and U.S. manufacturing.

Gloeckler has been in this campaign from the get-go, but it was Bill Simon’s face and passion that was visibly absent from the summit’s opening meeting Thursday (Aug. 14). Greg Foran, the new CEO of Walmart U.S. did appear onstage at the Thursday’s summit. Foran, who previously ran Wal-Mart’s China operations, said he fully supports the U.S. jobs initiative because it makes economic sense.

Wal-Mart CEO Doug McMillon concurred.

“We need manufacturing here because we have so many stores here and we need the jobs so people who live near those stores can shop more.”

Gloeckler said 200 suppliers attended this year’s summit and 87 component manufacturers were also there with exhibits to help suppliers put the puzzle pieces together. There were 42 state delegations and representatives from Puerto Rico.

“We have 359 meetings scheduled for tomorrow (Aug. 15). That’s 20% more than last year,” she said.

Gloecker also gave an update on the recent Open Call event held in Bentonville.

“We had never done that before but it was an incredible day. We held 800 meetings for new products and awarded 15% of them contracts on the spot. Another half of them, we continue to talk about ongoing possibilities,” she said.

Many of the new products like Trash Ease, Jen’s Crab Cakes and Taco Plates, because they are made in the U.S., will be in stores by the holidays, Gloeckler said. The update Gloeckler gave on her efforts to onshore patio furniture manufacturing or assembly was underwhelming. She said after an exhaustive search and more research, most products cannot now be made competitively in the U.S. This was an unexpected outcome for Gloeckler who had hoped the long lead times and short sales window for bulky patio furniture would be a sure fit for sourcing in America. 

“It was a learning experience and this is what we found out. The suppliers who contacted us were open-minded, nimble, smart and by all means the experts. Seven out of 12 items we examined were significantly more expensive to make in the U.S. Though all of our order commitments are made for 2015, I hope to have five items made in the U.S. by the 2016 season,” Gloeckler said.

WAL-MART CRITICS
Not all are impressed with Wal-Mart’s effort to boost U.S. manufacturing.

“If you think Walmart is making this pledge for purely PR reasons, you’d be both right and wrong,” Alliance for American Manufacturing President Scott Paul said in a statement. “Right, in the sense that lots of folks blame Walmart and its sourcing practices for the decline in manufacturing jobs, and thus eager to garner some positive publicity. But wrong, in the sense that – in some cases – the economics now favor “reshoring” of work back to the U.S., due to an emerging domestic energy cost advantage, rising wages in Asia, and wage stagnation in the U.S.”

Mary Bottari, deputy director at the Center for Media and Democracy and a former trade analyst for Public Citizen’s Global Trade Watch, blamed Wal-Mart and its “relentless pursuit of cheap goods” for the decline in U.S. manufacturing. The Center for Media and Democracy recently added new information on its website tracking Wal-Mart claims related to its onshoring effort.

And not to be left out when it comes to criticizing Wal-Mart, the head of the AFL-CIO also blamed the retailer for manufacturing job losses and low wages.

“It’s about time Walmart figured out that America’s workers are the most qualified and the best skilled at getting the job done,” AFL-CIO President Richard Trumka said in a statement. “For decades, Walmart has led the charge on outsourcing and a global race to the bottom. But workers will not benefit from a Walmart-ification of our manufacturing sector. Jobs in the Walmart model won’t restore America’s middle class or build shared prosperity given the company’s obsession with low labor costs and undermining American labor standards.”

RECENT SUCCESS
During the summit’s opening meeting Wal-Mart shared several success stories involving more U.S. manufacturing jobs as a result of the involvement.

Burt Hanna of Hanna’s Candles, John McCutcheon of PolyTech Plastics and Mel Redman, all based in Northwest Arkansas said their businesses directly were able to add jobs because of the Wal-Mart initiative. 

South Carolina Governor Nikki Haley also announced another victory for her state during Thursday’s summit. Enor Corp, a family-owned manufacturer of plastic toys, outdoor games and junior sports items, is establishing a new manufacturing facility in Fairfield County to supply U.S.-made toys to Walmart stores. The multi-million-dollar investment is expected to create 151 jobs to Fairfield, S.C.

Enor is the fifth Walmart supplier announcing a new facility in South Carolina since August 2013, joining Element Electronics, Louis Hornick & Co., Kent International and Giti Tire. Element Electronics made their deal exactly one year ago at Wal-Mart’ first manufacturing summit in Orlando. Today after a $7.2 million investment there are 325 jobs this year and the plant is sending televisions to Wal-Mart every day.

“That’s pretty amazing to think that plant didn’t exist a year ago,” Gloeckler said.

FUNDING INNOVATION
Kathleen McLaughlin, president of the Walmart Foundation awarded seven universities with a total of $4 million to fund innovative research that supports new manufacturing processes around injection molding and textile dyes. The awards were made possible from a collaboration between Walmart, the Walmart Foundation and the U.S. Conference of Mayors (USCM), who pledged to give $10 million for innovative research toward manufacturing over the next five years.

The fund focuses on the development of domestic manufacturing with a specific goal of advancing the production or assembly of consumer products in the U.S.

“Innovation is part of the heart and soul of Walmart,” Gloeckler said. “By investing in American ingenuity originating everywhere from the research lab to the assembly line, we can transform our approach to manufacturing to be more cost-effective and efficient. We can bring more jobs and more production back into American communities.”

The grant recipients were selected for their ability to address two key areas that currently present barriers to increased domestic manufacturing: Reducing the cost of textiles manufacturing, including home textiles and apparel, in the U.S. by addressing obstacles throughout production; and Improving common manufacturing processes with broad application to many types of consumer products.

Following are the 2014 Walmart U.S. Manufacturing Innovation Fund grant winners.
• Georgia Tech Research Corporation for innovation of thread-count-based fabric motion control, a critical enabling technology for the automated production of sewn goods.

• Indiana University-Purdue University at Indianapolis (IUPUI) to advance and accelerate the industrial implementation of metal 3-D printing for the manufacturing of plastic injection tooling as an alternative to current metal-shaping practices.

• North Carolina State University College of Textiles to address challenges to manufacturing of furniture cushions in the U.S. by implementing new technologies in both fabric printing and cut-and-sew automation.

• Oregon State University to develop two novel alternative mold fabricating approaches, and evaluate for functionality, precision and cost reduction potential.

• Texas Tech University to support collaborative research on cotton breeding and biotechnology, cotton production, and various aspects of textile manufacturing, dyeing efficiency and specialty finishes.

• University of Texas at Arlington to develop a novel manufacturing system that will autonomously prepare small motor sub-systems and assemble the motor components.

• University of Georgia Research Foundation to develop an innovative approach to fabric dyeing that will greatly reduce, and perhaps eliminate, the need for water in dyeing cotton and cotton/polyester fabrics and yarns.

A Washington, D.C.-based energy efficiency advocate told Arkansas regulators and others on Thursday that the state could see huge economic growth, save billions of dollars in power costs and create thousands of new jobs by reducing demand for electricity from the nation’s power grid.

“Arkansas must adopt as much of an energy efficiency policy as possible, which will allow you to manage future costs of electricity in the state,” said Neal Elliott, associate director of research for the American Council for an Energy-Efficient Economy. “It just makes good economic sense for the state.”

Elliott was the guest speaker at a luncheon sponsored by the Arkansas Advanced Energy Foundation (AAEF) at Heifer Village in downtown Little Rock. Elliott told the overflow crowd that Arkansas has a great opportunity to use energy efficiency policies to comply with the Environmental Protection Agency’s recently proposed guidelines to cut so-called dirty air emissions at coal-fired power plants.

Elliott’s comments also served as a backdrop to the second meeting later this month between nearly 20 stakeholder groups and state regulators from the Arkansas Department of Environmental Quality (ADEQ) and the Arkansas Public Service Commission (PSC) to discuss the EPA’s proposed rules. In fact, many of the attendees at the AAEF luncheon included state regulators and stakeholders who will take part in the Aug. 28 meeting at the ADEQ headquarters.

The PSC and ADEQ have been tasked by Gov. Mike Beebe to oversee the process of developing new rules to meet the EPA mandate in Arkansas. ADEQ is currently in the process of preparing the necessary paperwork to seek the assistance of a meeting facilitator for future stakeholder meetings.

President Obama’s proposal, called the Clean Power Plan, mandates a 30% reduction in carbon dioxide emissions from existing power plants by 2030 from 2005 levels, mainly targeting the nation’s fleet of more than 600 coal-fired plants that currently supply the lion’s share of the nation’s electricity needs. The public comment period on the EPA docket began June 18 and must be received by federal regulators on or before Oct. 16, 2014.

Overall, 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 the remaining 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.

The EPA target for the state of Arkansas is a 47% reduction in carbon emissions. Elliott said Arkansas can meet 40% of that goal if it adopts a plan that includes energy efficiency measures.

“But you shouldn’t wait to see what the EPA will do,” he warned.

Nationwide, Elliott said energy efficiency policies and programs already in use in other states are projected to reduce electricity demand by 25% or more, and cut carbon emissions by 26%. In a best-case scenario where the nation invests $47 billion in energy efficiency policies by 2030, the net benefit would include a $17.2 billion increase in Gross Domestic Product (GDP) and the addition of more than 611,000 new jobs, he said.

In Arkansas, Elliott said the state would see the addition of nearly 5,000 new jobs by 2030, an increase of $446 million in Gross State Product (GSP), and total energy savings of $3.8 billion. Currently, only half of the state’s electricity power load is covered by energy efficiency programs.

“You need to start doing something now,” Elliott said. “It can contribute to economic growth in Arkansas because it will keep energy dollars local.”

The Washington, D.C.-based researcher closed his hour-long presentation by challenging Arkansas regulators and energy stakeholders to take a long look at adopting energy efficiency policies as part of the state’s discussion to comply with the EPA guidelines to cut carbon emissions.

“It will minimize the cost of compliance, reduce energy bills for all customers and grow the economy and create jobs,” he said. “Energy efficiency makes sense even without the EPA climate rules.”

The U.S. Environmental Protection Agency announced a new a criminal investigation into a chemical spill in Monett, Mo. from a wastewater facility operated by Tyson Foods. If the EPA charges Tyson Foods, the company could face fines and loss of lucrative government contracts.

“We are cooperating with the Environmental Protection Agency but cannot predict the outcome of its investigation at this time,” the company noted in a recent filing with the Securities and Exchange Commission.

The wastewater discharged in May polluted water in Clear Creek killing an estimated 100,000 fish along a six mile stretch and created odor issues at the facility. The EPA said it issued a search warrant on Tyson’s Monett facility looking for documents and records as part of a criminal investigation into the incident.

The wastewater emitted by the Tyson plant contained Alimet, which is a liquid animal feed supplement, from another company facility in Aurora, Mo. The polluted water was discharged to the city of Monett's sewer system. The Missouri Department of Natural Resources (DNR) said the discharge caused operational problems at the city's wastewater treatment facility.

The DNR cited Tyson with a notice of violation for the fish kill. The agency also cited the city of Monett for failing "to operate and maintain facilities to comply with the Missouri Clean Water Law and applicable permit conditions".

Missouri Attorney General Chris Koster also filed a lawsuit against Tyson Foods for "unlawful dumping of untreated industrial wastewater" that led to the fish kill in Clear Creek.

Missouri’s lawsuit alleges six violations and seeks penalties, compensation for damage to the stream and reimbursement for the state’s investigation costs.

Tyson assumed responsibility for the accident in May issuing an apology through an ad in the local newspaper. Tyson noted in the ad that the company cannot reverse what happened, but the meat company said it plans to make it right.

“Water is a critical natural resource and we work to protect it at all of our locations. ... We’ll be looking at opportunities to partner with non-government organizations that work on ecology projects in Missouri to address issues in the creek. As we learn more and have these discussions, we’ll then be able to better determine how we can help resolve these issues. We’re committed to making amends,” Tyson management noted in the public apology which ran in the local newspapers following the accident.

Tyson said they met with some community leaders and asked to meet with the Missouri Department of Natural Resources to see how they can help improve Clear Creek.

"We’re sorry about what happened and have started trying to make things right," Tyson spokesman Worth Sparkman told The City Wire in May.

“We’ve also taken a hard look at how we manage environmental matters at Monett and are improving our processes because we don’t want this to ever happen again," Sparkman added.

Municipal candidate filings drew to a close at noon Friday (Aug. 15) and a large number of candidates have filed to run for positions ranging from city council to mayor in cities across Crawford and Sebastian Counties.

Municipal elections across the two counties will take place on the same day as the general election, Nov. 4.

Candidates who filed were required to turn in signatures of 30 registered voters in their respective wards or cities, depending on the office which they were seeking.

Filing for offices began July 25 and were open for three weeks.

ALMA
In the race for Alma mayor, former State Rep. Ed Thicksten and Keith Greene announced their candidacies within the last two weeks. A third individual to show up on the ballot was Gary Perry.

All other positions up for re-election in Alma have no opposition. These include city clerk, where Crissy Inge will take office in Janurary; Ward 1, Position 1 Alderman John Tribulak; Ward 1, Position 2 Alderman Maria Washburn; Ward 2, Position 2 Alderman Edward L. Wakefield; Ward 3, Position 1 where John Ware will become alderman and Ward 3, Position 2 where Rinda Baker will also take office as an alderman in January.

Ward 2, Position 1 had no candidates file for the position and will be declared vacant and be appointed by the city council in January.

GREENWOOD
In the race for mayor, incumbent Doug Kinslow — who was elected mayor in a special election May 20 — is fighting to keep his new office against a challenge from Garry Campbell.

Kinslow's special election win on May 20 came after the city of nearly 10,000 suffered the resignation of Mayor Del Gabbard in January, followed by the incapacitation of Acting Mayor Jim Gossett in March due to an automobile accident, placing City Clerk and Treasurer Sharla Derry in charge of running the city on a day to day basis until Kinslow's election.
www.thecitywire.com/node/32761

Should Campbell pull out a victory, he would be the fifth mayor of Greenwood in a year.

As for Derry, she said in April she had no desire to seek the mayor's office and held true to her word, instead running for re-election to her position unopposed.

Other races of interest in Greenwood include the Ward 2, Position 1 alderman race, where incumbent Richard "Lance" Terry is being challenged by Charles wayne Lowe and Ward 3, Position 1 where Jim Newcomb and A.C. Brown Jr. are vying for the open seat.

Ward 1, Position 1 was open and James Burges III will win the seat unopposed in November. City Attorney Michael Hamby will also win re-election to his position after no opponents challenged him.

MANSFIELD
The race for Mansfield mayor is open with four candidates vying for the city's top spot.

The candidates for mayor of the small Sebastian County city include Larry Austin, Keith Dedmon, Daniel Mayor and Ricky Gene Newman.

Races for city council are also seeing multiple candidates, which could result in a runoff in Ward 2, where three individuals are fighting for the Position 1 seat. They include incumbent Christi Salmeron, Tyna Martin and Nathan Sterling.

In Ward 1, Position 1, Alderman Geroganna Mabry faces Sandi Bertaux in the Nov. 4 general election.

Ward 3, Position 1 Alderman Rick McDaniel faces no opposition to his re-election.

VAN BUREN
Van Buren will only have two men vying for the top spot at city hall, with Mayor Bob Freeman facing a challenge from Alderman Max Blake.

City Attorney Candice Settle, City Clerk Barbie Curtis; Ward 1, Position 1 Alderman Mary Ann Dodd; Ward 1, Position 2 candidate James C. "Jim" Petty; Ward 2, Position 1 Alderman David Moore; and Ward 3, Position 1 Alderman Donna Parker are all running unopposed.

The only two opposed seats are Ward 2, Position 2 with Scott Curtis and Darrol Sparkman challenging each other for Blake's open seat and Ward 3, Position 2 where Alderman Johnny W. Ragsdale is facing a challenge from Alan Swaim.

Other cities and positions of note in Crawford and Sebastian Counties include:
BONANZA
Mayor - Ronald Norris, John Orick, Tony Strickland Sr., Mayor David Conley, and Elmer Nelson;
Ward 1, Position 1 Alderman - Patricia Norris and Bill Joe Collins;
Ward 1, Position 2 Alderman - Walter Slavens, Alderman Karen Littlejohn-Flores, and Paul Wise;
Ward 2, Position 1 Alderman - Johnny Wilson;
Ward 2, Position 2 Alderman - Lorie Grady;
Ward 3, Position 1 Alderman - Daniel Lunsford;

CEDARVILLE
Mayor - Wayne Bentley, Darren Langley Jr., and Mayor Glenanna O'Mara;
Ward 1, Position 1 Alderman - Timothy Breshears;
Ward 1, Position 2 Alderman - Jonathan Odom;
Ward 2, Position 1 Alderman - Alderman David Clark Coombes, Kenneth (KC) McClendon, and William Brown;
Ward 2, Position 2 Alderman - Alderman Wendell Moore, Rogers Johnson, and Brenda Burner;

MOUNTAINBURG
Mayor - Mayor Ralph Bryant, Douglas Coleman, Robert Dean III, Scott Dyer, Michael L. Harrison, and Neal Moon;
Ward 1, Position 1 Alderman - Open Seat;
Ward 1, Position 2 Alderman - Alderman Angela Rupp;
Ward 2, Position 1 Alderman - Michelle L. Henson;
Ward 2, Position 2 Alderman - Open Seat;
Ward 3, Position 1 Alderman - Open Seat;
Ward 3, Position 2 Alderman - Open Seat;

MULBERRY
Mayor - Mayor Gary baxter and Herman E. Luper;
Ward 1, Position 1 Alderman - Sheila Chastain;
Ward 1, Position 2 Alderman - Stacy Muntz;
Ward 2, Position 1 Alderman - Elizabeth Jordan, Terry Lewis and Alderman Bobby Tweedy;
Ward 2, Position 2 Alderman - Alderman Johnny Ray Kimes, Robert Reeves, Daimien Rice;
Ward 3, Position 1 Alderman - Alderman Dottie Goodnoh; and
Ward 3, Position 2 Alderman - Alderman Jimmy Moore.