An area Wal-Mart is most hammered on by media and unions is the reduction in employees per store – especially when the retailer’s customer ratings are mixed and sales are sluggish.

Wal-Mart appears to have taken steps to add employees to stores in the recent quarter to the tune of $200 million in added wages and salaries from the year-ago period.

“During the quarter, we allocated additional associate hours to specific areas of the store, such as front end, deli, bakery, and overnight stocking to improve overall customer service. We also sustained incremental labor expenses related to major department re-lays in entertainment and sporting goods. In total, salaries and wages were up more than $200 million compared to last year,” according to Randy Hargrove, Walmart spokesman.

Hargrove said Wal-Mart will continue to invest in wages for the rest of this year, mostly adding hours to existing workers schedules.

In March, Bill Simon, then CEO of Walmart U.S., acknowledged the retailer was losing $3 billion annually from lost sales because shelves were not always being replenished in a timely manner. Wal-Mart said then it would adjust store labor levels and give employees opportunities to work more hours.

In June, Cleveland Research noted that “labor investments had been very selective to almost non-existent,” adding that was the ”biggest problem by far” with respect to the retailer’s continued on-shelf availability shortfalls.

John Marshall, senior capital market analyst for the United Food and Commercial Workers Union, said his group welcomes the announcement that more labor will be put back into stores.

“I want to be clear we are hopeful that the new CEO Greg Foran will work to help this continue, because we haven’t really seen it yet,” Marshall told The City Wire.

Wal-Mart confirmed that store managers have the most say as to how many workers it employs. But Marshall said after many discussions with store managers he was told a computer model predicts the number of workers needed and that often is more than a store budget can handle.

Sherry Curtis-Swenson, a store manager of the new supercenter in Springdale, recently said the new store employed a few more than 300, and skewed heavier than normal for managers, which she said was important for effective operations given it was a new store with more new hires than transfers.

Marshall said Arkansas is one state where store employee counts have remained higher than most states. He said Wal-Mart workers are optimistic in Foran’s leadership given his vast experience in operations. 

“We take him at his word that he is serious about making sure stores are in-stock, clean and running efficiently,” Marshall said.

Foran noted in the pre-recorded earnings call that he will be in stores hearing directly from customers and associates and tracking performance. He said during the retailer’s manufacturing summit in Denver on Aug.14 that Wal-Mart must perform better because consumers today have a long list of shopping options.

He said a consumer decision is based on many factors, including distance to the store, how clean it was during the last visit, lines at the cash register, adequately stock shelves and price. Foran said they quickly review those factors and that’s what dictates where they will shop. Foran said it is he and his army of 1.1 million workers to make sure the choice is Wal-Mart.

Houston-based Kinder Morgan’s $70 billion tax-friendly deal to bring all of its energy assets under one corporate umbrella and stock symbol will not have an impact on the pipeline giant’s Arkansas operations, company officials said.

Kinder Morgan spokeswoman Melissa Ruiz said the company’s blockbuster announcement earlier last week to acquire all of the outstanding stock of its former master limited partnerships — Kinder Morgan Energy Partners, L.P. (KMP), Kinder Morgan Management, LLC (KMR) and El Paso Pipeline Partners, L.P. (EPB) — will not impact the company’s day-to-day operations “at all.”

“It is still business as usual,” Ruiz told Talk Business and Politics.

Once the deal is completed, Kinder Morgan-owned subsidiaries will have a stake in or operate nearly 80,000 miles of pipelines and 180 terminals across the U.S. Kinder Morgan’s pipelines transport natural gas, gasoline, crude oil and other products. Its terminals store petroleum products and chemicals, including ethanol, coal, petroleum coke and steel.

Kinder Morgan now owns or has an interest in two major natural gas pipelines that originate or transport product through Arkansas. Ruiz said the company also operates two product terminal facilities in Pine Bluff and Blytheville that employ 327 active local workers.

The Fayetteville Express Pipeline (FEP) is a 185-mile natural gas pipeline system that originates in Conway County, continues eastward through White County and terminates at the Trunkline Gas Co. in Panola County, Miss. The pipeline has a capacity of nearly 2 billion cubic feet per day and brings natural gas from the Fayetteville Shale to other pipelines serving Midwest and Northeast markets. (Link here for a Kinder Morgan asset map.)

Kinder Morgan’s Natural Gas Pipeline Co. of America (NGPL) is the largest transporter of natural gas into the high-demand Chicago market, and one of largest interstate pipeline systems in the U.S. The 9,200-mile pipeline enters Arkansas from Northwest Texas and crosses the state into Southeast Missouri transporting natural gas into the nation’s third largest metropolitan area. Kinder Morgan operates NGPL and owns a 20% interest in the pipeline company. Myria Holdings Inc. owns the remaining 80% stake.

Besides the massive breadth and size of the combined company, the deal will also bring huge benefits to Kinder Morgan shareholders when the Houston-based pipeline giant begins trading as a single, publicly-traded stock, under the symbol “KMI.”

“This transaction dramatically simplifies the Kinder Morgan story, by transitioning from four separately traded equity securities today to one security going forward, and by eliminating the incentive distribution rights and structural subordination of debt,” said Richard Kinder, company president and CEO.

Shares in the new Kinder Morgan will have a projected dividend of $2 in 2015, a 16% premium over the anticipated 2014 dividend of $1.72. Kinder said the company expects to grow the dividend by nearly 10% each year from 2015 through 2020, with excess coverage anticipated to be greater than $2 billion over that same period.

Additionally, the combined company will be the largest energy infrastructure company in North America and the third largest energy company overall with an estimated enterprise value of approximately $140 billion, behind only ExxonMobil and Chevron. Analysts also estimate the deal will generate about $20 billion in income-tax savings for the Houston pipeline giant over the next 14 years.

And although Ruiz said the company’s operations will not be impacted immediately, Kinder told Wall Street analysts during a conference call that by lowering the cost of equity and debt capital – the deal would open the door for “growth and acquisition opportunities” in the midstream energy market.

“We believe that KMI will be a valuable acquisition currency and have a significantly lower hurdle for accretive investments in new energy infrastructure,” Kinder said. “In the opportunity-rich environment of today’s energy infrastructure sector, we believe this transaction gives us the ability to grow KMI for years to come.”

Kinder Morgan said the deal is expected to close by the end of the year.

Arkansas’ July jobless rate of 6.2% is well below the 7.7% of July 2013, but the decline of more than 26,000 in the state’s labor force and an employment decline of almost 6,000 in the year-over-year period indicates a struggling economy.

The July rate of 6.2% was below the June rate of 6.3% and below the July 2013 rate of 7.7%, according to the report issued Monday (Aug. 18) by the U.S. Bureau of Labor Statistics. The July figures are subject to revision. The June rate was revised from 6.2% up to 6.3%.

Arkansas’ labor force was an estimated 1.298 million in July, below the 1.306 million in June, and down 2.01% compared to 1.324 million in July 2013. The year-over-year comparison shows an estimated 26,682 fewer Arkansans in the labor force. There are 69,228 fewer Arkansans in the labor force compared to the peak (1.367 million) in May 2008, a decline of almost 5.06%.

The number of employed in Arkansas during July was 1.217 million, below June employment of 1.224 million, and down an estimated 5,938 jobs compared to July 2013. The number of unemployed was an estimated 81,031 during July, down from the 81,857 in June, and well below the 101,775 in July 2013.

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

'LEAVE THE STATE'
Jeff Collins, an economist with The City Wire, said the July jobs report “certainly says something about the job opportunities in the state.” He said the decline in the workforce doesn’t mean that more than 26,000 are out of jobs, but “what you likely have are people who leave the state and go to another state to seek employment.”

Collins also said Arkansas’ economy has not transitioned to new economic realities at the same speed as other states.

“The workforce in the state of Arkansas, and this is a very generalized comment, does not compete well for certain types of employment. Unfortunately, the type of jobs we do compete for are dwindling and highly mobile. So if you look at what sectors have been growing in Arkansas, you have a lot of growth in the service sector, ... and you see that manufacturing has just been bleeding over several decades,” Collins said.

He said the growth in service sector jobs typically results in lower paying jobs than the jobs lost in the past decade. Solutions to improve Arkansas’ job numbers, according to Collins, includes “giving Arkansans more tools to grow their own businesses” and to “radically transform” the state’s workforce training programs.

Kathy Deck, director for the University of Arkansas’ Walton College Center for Business and Economic Research, said that while the falling unemployment rate will garner headlines, the declining labor force should be of top concern.

“What’s more is that that Arkansas labor force has been shrinking, while the U.S. labor force has been growing slightly,” Deck added. “And, finally, an interesting component is that the labor force is shrinking in every single metro area of the state, not just the rural areas.”

ARKANSAS SECTOR NUMBERS
In the Trade, Transportation and Utilities sector — Arkansas’ largest job sector — employment during July was an estimated 242,300, up from 242,200 in June and ahead of the 241,100 during July 2013. Employment in the sector hit a high of 251,800 in March 2007.

Manufacturing jobs in Arkansas during July totaled 154,400, down compared to 154,800 in June and above the 151,900 in July 2013. Employment in the manufacturing sector fell in 2013 to levels not seen since early 1968. Peak employment in the sector was 247,300 in February 1995.

Government job employment during July was 215,900, up from 214,600 in June and above the 215,600 during July 2013.

The state’s Education and Health Services sector during July had 174,300 jobs, down from the revised 174,400 during June and up from 171,800 during July 2013. Employment in the sector is up 22.3% compared to July 2004.

Arkansas’ tourism sector (leisure & hospitality) employed 108,500 during July, up from 108,200 during June, and above the 105,400 during July 2013. Employment in this sector reached a high of 109,100 in March.

The construction sector employed an estimated 47,400 in July, up from 47,100 in June and above the 44,700 in July 2013. The sector is off the employment high of 57,600 reached in March 2007.

NATIONAL, REGIONAL DATA
The BLS report also noted that 49 states had unemployment rate decreases from a year earlier, and one state (Alabama, 7% in July compared to 6.5% in July 2013) had and increase. The national jobless rate during July was 6.2%, and was down from the 7.3% in July 2013.

Mississippi had the highest unemployment rate among the states in July at 8%. North Dakota again had the lowest jobless rate at 2.8%.

The July jobless rate in Oklahoma was 4.6%, up from 4.5% in June and down from 5.6% in July 2013.

Missouri’s jobless rate during July was 6.5%, unchanged compared to June and down from 6.8% in July 2013.

Home sales in the Fort Smith area continue to show growth year to date, with Crawford County's sales volume up 40.25% and Sebastian County sales volume up 7.29%.

For the first seven months of 2014, Crawford County has posted $40.314 million in sales versus $28.745 million during the same period in 2013. Sebastian County saw sales of $103.748 million so far this year versus $96.702 this time last year.

July, the most recent month sales figures were available, showed a 13.62% increase in sales for Crawford County to $6.25 million, while Sebastian County's total was down by 1.02% to $18.616 million.

Mont Sagely, the principal broker and owner of Sagely & Edwards Realtors in Fort Smith, said the sales figures for the year are a welcome change.

"That pleases me that Crawford County has started to come back because Greenwood, Alma, and Van Buren (have) been sluggish for the longest time," he said.

The rise in home values, Sagely said, also show that the economy locally is starting to pick up pace with the rest of the nation in terms of jobs and economic development.

"In the River Valley area, it's always been a lagger in keeping pace with the (national) economy," he said. "So I think what we're seeing is finally what the rest of the nation has been seeing. Like when we saw the downfall, we didn't see it as fast as the rest of the nation did. But we're finally reaping the benefits of the strong sales across the country. I think that is probably the reason why, because these two counties have always been slow to respond to the national economic trends."

Even with the improvements, he said it is still a buyers market as evidenced by median sales prices.

In Crawford County, the median sale price for a home this year is $105,000, which only represents a $1,000 increase from the same period last year. In Sebastian County, the figure has held at $115,000 since this time last year.

"There are some signs that the market is catching in certain price ranges, but overall it hasn't turned over to a seller's market by any means," he said.

What could eventually start to impact the local market is the loss of Van Buren's Rural Development Loan eligibility starting Sept. 30. Sagely said he does not necessarily think the loss is going to produce dramatic shifts in sales volume, but it would be felt in Van Buren.

Steve Echols, a mortgage lender with Benefit Bank in Fort Smith, said buyers seeking to stay in Van Buren will just need to work harder to get into a home and look at other loan options. He said the most likely alternative to the Rural Development loan would be an FHA loan.

"Probably the next friendliest is the FHA loan, which is 3.5% down versus the zero down the RD offers," he said. "Then there are also 3% down conventional loans. The main difference is the credit qualifying (for a conventional loan) is a little more restrictive."

He said cost-wise, there was not much difference in the two when factoring the lower interest on FHA coupled with its higher mortgage insurance costs relative to a conventional loan with 3% down. But for buyers in Van Buren still looking to lock in the Rural Development loan with zero down, he said there is a limited amount of time.

"The way we understand it, the submission to the Rural Development office should be made by September 30. So that would be a complete application package to Rural Development which would include an appraisal. Those take 10 days to two weeks (to complete). So I would say as September comes and as you get closer tot he 10th of the month or so, that's when you're going to have a difficult time getting the appraisal back to get it all in order for the submission. But as long as the submission is made by Sept. 30, then you are potentially in advance of the cutoff."

As for whether the loss of the Rural Development loan would hurt Van Buren and Crawford County sales, Echols said it likely would not make a huge difference.

"I think ultimately the people that need and desire an RD loan, they'll go find it. If that means going to Alma or Cedarville, they'll do that. But those that want to be in Van Buren or like communities, then they'll use an alternate loan program. I'm sure it may impact the numbers some, but ultimately where there is a will, there is a way and people will conform."

Home Sales Data (January - July)
• Crawford County
Unit Sales
2014: 352
2013: 268

Total Sales Volume
2014: $40.314 million
2013: $28.745 million

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

• Sebastian County
Unit Sales
2014: 781
2013: 696

Total Sales Volume
2014: $103.748 million
2013: $96.702 million

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

It was just four years ago that Trane laid off more than 200 at its Fort Smith facility, but production has returned and with it, so have many of the jobs lost in 2010.

According to plant manager Chris Farnsworth, the Fort Smith air conditioning factory secured a new labor contract in March of 2013 and with it, restored many of the positions lost in 2010, which at the time broke down to 197 hourly production workers and 15 salaried positions.

Trane previously employed as many as 500 as of late 2009.

"Things have really started rolling," he said. "Leading up to 2013, production was increasing. But with the new labor contract, that allowed us to bring a new line from Trenton, New Jersey, and increase the size of the labor line."

Farnsworth said Trane has also invested more than $800,000 in the Fort Smith facility while rearranging the facility to improve productivity.

"A portion of the big rearrangement efforts that we've been doing the last six or nine months has been actively clearing floor space. Right now with one clear exception, we have 65,000 square feet of clear space that was once full. That wasn't due to outsourcing (of production), that was due to taking the areas that were consuming space and using lean tools, compressing those areas, rearranging them, getting rid of waste and relocating them to other areas of the plant ..."

The open space will allow Fort Smith to possibly receive additional production lines, he said.

Regardless of whether Trane locates another production line to Fort Smith, Farnsworth said the company was looking to do additional hiring beyond the recalled employees who have returned to work.

"So currently, we've recalled everybody off the recall list. All the people we've laid off, we've attempted to return to work. Quite a few have accepted. Quite a few declined and have moved on to other jobs. But we're in a position where we're bringing on brand new hires," he said, adding that the company has brought on 29 new hires in the last month.

"Since March 2013, we've returned 100 people to work — either layoffs or new hires," Farnsworth added.

And even more positions are available for hire at Trane's Fort Smith manufacturing facility.

"We're actively looking for skilled trade people, maintenance and electricians. One is due to retirement, but a couple more are due to the new growth we've seen," he said. "We need more trade skills to keep up with the higher production volume."

The new labor contracts are structured to provide raises for individuals hired at the facility, Farnsworth said, with the senior-level employees who survived the layoffs making $18.90 per hour, while those recalled are starting somewhere between $12 and $13.80.

"The brand new hires start around $11.50 on a three year progression up to the mid-$13s. But with general wage increases along the way, they should be somewhere north of that. That would get them to $13.50 over three years and then be eligible for annual general wage increases, as negotiated (in the labor contract)."

Within the next couple of weeks following the latest round of hiring, Farnsworth said the facility should employ 230 hourly workers and 30 salaried, for a total of 260. The figure is just more than half the 2009 level of employment.

Asked to look at the future and how many more hourly workers Trane could add, Farnsworth said it was too difficult to pinpoint.

"I won't take a stab at a number, but I do believe with the productivity this facility has generate and the positive financial impact of the business, we'll continue to grow and be a presence in Fort Smith," he said, adding that any time a manufacturer is adding jobs it is a positive sign for future growth.

"This is great news for us and great news for the community."

The Fort Smith area manufacturing sector employed an estimated 18,400 in June, up from 18,200 in May, and unchanged compared to June 2013. The July metro numbers are scheduled to publish on Aug. 27.

Manufacturing employment is down almost 36% from a decade ago when June 2004 manufacturing employment in the metro area stood at 28,500. Also, the annual average monthly employment in manufacturing has fallen from 28,900 in 2005, 19,200 in 2012, and to 18,300 in 2013.

Bonds that will pay for construction of the new Crawford County jail were issued Monday (Aug. 18), with rates coming in lower than expected saving the county about $50,000, according to County Judge John Hall.

Speaking shortly after the bonds were sold Monday afternoon, Hall said the county's ability to secure an A+ rating allowed interest rates to be lower than expected.

"The bond market fluctuates daily," he said. "We had a prospectus as far as anticipated rates as of last Friday and it came in (lower than expected). I think it was five basis points down from Friday to Monday. So the sale of the bonds was better, the cost of the bonds was better than what was anticipated.”

The total proceeds the county will receive from the bond sale is $21.91 million at a 2.23% true interest cost over the life of the bond.

Kevin Faught of Stephens Investments in Little Rock handled the bond issuance for Crawford County and said based on anticipated sales tax revenues from the half cent approved by voters in May for construction of the jail and a quarter cent approved for law enforcement operations, the bonds should be able to repaid in as little as eight years assuming revenues stay flat. Should revenues improve, he said the bonds could be repaid even faster.

The half cent sales tax for jail construction is to sunset in 10 years while the quarter cent for law enforcement, which can also be used for debt repayment while the jail is under construction, will be a permanent sales tax.

In an ordinance that included an emergency clause, approved by the Crawford County Quorum Court Monday, it is stated that U.S. Bank in North Little Rock will be the trustee of the bond proceeds which will be used to pay vendors involved with the jail project. In short, it means the money will never be directly touched by the Quorum Court or county judge.

Should the Quorum Court decide to begin using the quarter cent portion of the proceeds for law enforcement operations before construction of the jail is complete versus debt repayment, the trustee will remit those proceeds to the county. Faught said closing on the bonds will take place Sept. 24. Beginning the next day, Hall said the county could begin expending money for jail construction including purchase of land on U.S. Highway 64 just east of the Van Buren city limits.

Already, the county has been accruing expenses that will need to be reimbursed from the bonds issued Monday he said.

"As we speak, the architects are designing the facility to go on the property that we're looking at. We've done the topography across there, we've core drilled it. We know the soils and environmental impact. So we know that we don't have a deal breaker (regarding the property). We're moving forward on a daily basis to continue to get all of our ducks in a row. Once we get the money, then we can move quite quickly to move forward and folks can see the actual start of construction.”

Per Internal Revenue Service policies regarding municipal and county bonding for capital improvements, Hall said at least 5% of the bond money must be spent within the first six months it is available.

For that reason, he said groundbreaking and construction on the jail should take place sometime in October or November.

"The timeline is to break ground and then have 18 months to build it. All this money has to be spent within 30 months or three years. This has to be completed in a three year period. That's the rules of the game. From Sept. 25th, it has to be done in three years.”

But any movement on the jail could be slowed by action of the Quorum Court's budget committee Monday, which voted 4-9 against Hall's request to hire a deputy county administrator to oversee construction of the jail at an annual salary of more than $35,000.

Justice of the Peace Carrie Jernigan, along with Justice James Lane, questioned the hiring of the position which would come with full benefits, including retirement. Hall said it was necessary to have someone on the jail project full time and he and others currently on staff did not have the ability to devote themselves to the project on a full time basis.

In other business, the Quorum Court's budget committee tabled a motion to allocate an additional $60,000 for the Crawford County Election Commission. The commission had previously notified the court that it would run out of money before the November general election without additional funding.

Committee Chair Mary Jan Blount indicated the committee would request a breakdown of expenditures prior to a full review of the election commission's request. Election Commissioner Bill Taylor indicated that the commission could stay afloat through the September school board elections but indicated it would have to receive funding prior to November.

When the Quorum Court approved its budget for this year, a line item was added for anticipated revenues from state election reimbursements that essentially placed those funds in the general fund instead of appropriating them to the election commission, Taylor said.

No date was given for when the budget committee could review the election commission's request.

Immigration, the federal budget and national defense were among the most discussed topics Wednesday (Aug. 20) at a town hall event held by U.S. Rep. Steve Womack, R-Rogers, at the Blue Lion (formerly Second Street Live) in downtown Fort Smith.

The topic of immigration saw a frank discussion between Humberto Marquez, who described himself as the child of immigrants who was brought the United States when he was young and does not know life outside of the United States, and Womack.

"I study international business. I hope to bring more business here in Arkansas, I want to create more jobs for Americans. So you're limiting our potential, the 3,800 young people who are living here in Arkansas (who could benefit from immigration reform), you are limiting the potential of them," Marquez said of Womack's vote against a program known as the Deferred Action for Childhood Arrivals (DACA).

According to the U.S. Citizenship and Immigration Services website, the program has been around since 2012.

"On June 15, 2012, the Secretary of Homeland Security announced that certain people who came to the United States as children and meet several guidelines may request consideration of deferred action for a period of two years, subject to renewal. They are also eligible for work authorization. Deferred action is a use of prosecutorial discretion to defer removal action against an individual for a certain period of time. Deferred action does not provide lawful status," the website reads.

Womack explained to Marquez that his vote against DACA was more about standing up to what he sees as an overreach of executive power by President Barack Obama.

"I want you to look at that vote from purely the perspective of the concept of do we have an imperial government? Is the president of the United States such the supreme leader that if he doesn't agree with the laws passed, duly passed by both chambers and signed into law by any president, that he has the single ability to change those laws to fit whatever objectives that he might have – political or otherwise. I want you to look at that vote not in terms of whether it's against you, but whether it's a vote to send a message to the president that he does not have the executive power to just basically ignore the laws of the land of the United States of America that for too long have been ignored by the administrations. And not just his, but previous administrations, both parties are affected here,” Womack said.

Womack continued by saying he believes the issues brought up by undocumented teens and college-aged students, also known as dreamers, should be addressed. But the issue of immigration reform can only be addressed once the border is secured.

As he spoke on the topic, Dr. Paul Beran, chancellor of the University of Arkansas at Fort Smith, spoke up and said based on his 45 years as a Texas resident, he did not believe the border would ever be secured. He said as long as individuals believe there would be economic opportunity in America, individuals would continue attempts to cross the border.

"These kids here, and the ones that fall into that category, we can argue about all day long. About President Obama, I don't disagree with the construct of your argument. I really don't disagree with that. But beyond how many angels can dance on the head of a pin kind of question, which I think that is essentially, what you're dealing with are people," Beran said, adding that he saw no reason Womack and Congress could not address the issue of what to do about dreamers and border security at the same time.

No one came out of the meeting with changed opinions, but as Beran told Womack after the meeting, "at least we're having the discussion."

When the topic of the budget was discussed, Womack said the only vote he regrets during his time in Congress was the vote that authorized the sequestration that forced massive budget cuts across all areas of government, including national defense.

"I voted for the Budget Control Act. Now, keep in mind, this is 2011. I'm (in my) second year in Congress. I'm still wet behind the ears, a little naive. Never in the wildest dreams did I think that the super committee (charged with finding budget cuts) would fail to get at least a substantial percentage of that $1.2 (trillion) in cuts. And I believed that in my heart and because I believed that in my heart, that rendered the sequestration piece of the law kind of moot, that it wouldn't be triggered. And if it did, it would be sort of inconsequential in size. But the super committee got nothing done. Zero. And that triggered sequestration and I had this great sinking feeling in my heart. I just voted for a bill… it's the one regret that I have," he said of the 2,700 votes that he has cast.

"(I regret it) not because I don't believe we need to pay our creditors and raise the debt ceiling, but because of the realization that the defense department was going to be the recipient of such drastic cuts in their budgets."

Two fire stations built and paid for using sales tax proceeds in Fort Smith and Van Buren came in at nearly the same price per square feet, with the Fort Smith fire chief noting the use of a construction manager for savings on the city's newest firehouse.

The city of Fort Smith most recently completed construction of station 11 at Chaffee Crossing on Feb. 24, 2014, at a cost of $3.18 million, according to figures provided by city Communications Manager Tracy Winchell and Fire Chief Mike Richards.

The costs included in the total are $2.733 million for construction, $177,023 for architecture and engineering work, as well as printing of plan documents and a state review of the project, and $3.941.15 in legal fees paid to the Daily and Woods Law Firm.

The facility is 12,560 square feet, which breaks the cost down to $253.17 per square foot. The total cost of the fire station is 3.7%, or $158,617, below original estimates, according to a memo Richards wrote to the Fort Smith Board of Directors in April following completion of construction.

"This savings was made possible by the decision to use the Construction management method of delivery," he wrote. "The Construction Management method of delivery allows value engineering and planning on the front end of the project thereby potentially saving the owner money at the end of the project. This method proved very successful and resulted in very few issues throughout the project.”

In all, the city paid a construction management fee of $179,500 to Beshears Construction. The company also served as the general contractor on the project.

While the final figures for Fort Smith's newest fire station came in 3.7% below estimates, the latest addition to the Van Buren Fire Department has come in slightly above budget but still on par with Fort Smith's price per square foot. According to Van Buren Mayor Bob Freeman, fire house number four, which was opened July 25, came in $132,624 over budget for a final total of $2.603 million. For the 10,310 square foot building, the price breaks down to $252.44 per square foot.

Van Buren did the same as its southern neighbor and hired a construction management firm to oversee the project and enlisted a three rounds of value engineering on the project. What hiked the price, the mayor said, was the decision made to have Crawford Construction install a new water line as part of the project.

"Where the fire station location was (on Northridge Drive), the water line wasn't extended down. So we went ahead and had Crawford Construction extend it instead of (contracting) it separately," Freeman explained.

While soil and environmental tests were completed before construction began, he said it also became apparent during construction of the new fire station that additional fill dirt was needed at the site since it would be housing heavy fire apparatus. An additional expense included fire hydrants at the urging of Fire Chief Jerry McAdoo, Freeman said.

While Van Buren and Fort Smith saw different financial results from the use of a construction manager for completion of the cities' respective fire stations, Freeman said Van Buren's overage is no different than running into unexpected costs in the construction of a home.

"Anybody who has ever built a house or done anything (like that) knows that once you get into it, you say, 'What we should have done is this,' and you make the change and move on. The base contract, as far as that was concerned, actually came in about $13,000 under what the base was and what the cost estimate was. These were just some changes we added to it while we were doing it.”

Final payment on the Van Buren fire house was to take place following approval of a resolution at Monday's (Aug. 18) city council meeting, but Freeman tabled the resolution due to a concern regarding condensation build up in the lighting at the new fire house.

"The chief told me Monday morning that we have some moisture condensation in some light fixtures. … We felt the condensation issue had to do with cold air from the ventilation system. So we have Crawford Construction look at it. Right now, it looks like a thermostat setting. But I decided to table it. As of yesterday, it was getting resolved.”

Both fire houses were built following the passage of sales taxes. Following the additions, Fort Smith now has 11 fire stations and Van Buren has four.

Heineken USA is among at least five adult beverage companies to hang a shingle near Wal-Mart’s corporate offices in Bentonville amid the retailer’s push to boost income and improve margins with more alcohol sales.

The White Plains, N.Y.-based adult beverage company will celebrate a grand opening on Sept. 15 at its first Northwest Arkansas office at 3201 Market Street, Suite 106, in Rogers. Local experts say others are soon to follow given Wal-Mart plans to double alcohol sales by 2016.

“We are excited to be expanding our presence in Northwest Arkansas to further align with Walmart & Sam’s Club strategies,” said Todd Pastor, a Heineken national account director serving Wal-Mart and Sam’s Club.

This move to Northwest Arkansas has been a gradual 18-month transition as the company built out its local sales team. Heineken USA said the need for an office made sense given its plans for future growth. The local team will primarily serve Wal-Mart and Sam’s Club.

“We were privileged to work with Heineken USA and Todd Pastor. A lot of thought, time, and creativity went into their space design, and we were excited to be a part of that. The Northwest Arkansas real estate market continues to improve. Leasing activity is up and there is more investor interest than we have seen in quite some time.” said Steve Fineberg, president of Steve Fineberg & Associates.

‘VENDORVILLE’
Cameron Smith, CEO of Cameron Smith & Associates, said his firm also worked with Heineken in preparation and staffing for this new office.

“According to our records about five new offices have opened here over the past year among those companies who play in the adult beverage space, creating roughly a dozen jobs,” Smith said.

Smith said Heineken’s move is part of the “Vendorville” attraction.

“We know for a fact that several other adult beverage companies are doing due diligence at this time and exploring the benefits of operating a sales office in Wal-Mart’s backyard. We expect more suppliers will follow,” he said. “Just as grapes planted close together are more productive, vendors in Bentonville’s Vendorville make each other better. Being gathered in Northwest Arkansas allows them to work with the best of the best.”

ANSWERING WAL-MART CALL
Wal-Mart’s campaign to be tops in beer sales began in 2012 when the retailer hosted a conference in Bentonville for the adult beverage industry. At the time Wal-Mart sought to double its alcohol sales by 2016 and grab a larger piece of the $46 billon U.S. beer market.

The retailer made a conscious effort to bring on more buyers for the adult beverage category and increase the amount of shelf space and promotional area for adult beverages in its stores.

It is also one of the categories that saw price investment by Wal-Mart as noted by former Walmart U.S. CEO Bill Simon during a speech given last fall at the Goldman Sachs investor conference.

“We continue to look for opportunities to invest in price. A great example for us is adult beverages. We have been continuing to move prices lower on that and seeing returns in the form of market-share gains in that category,” Simon noted.

ATTRACTING MILLENIALS
In November 2013, Latriece Watkins, divisional merchandising manger over alcoholic beverages, told The City Wire that the retailer’s efforts were helping to draw in more Millennial shoppers. She said the Millennials were also having an impact on the entire adult beverage industry.

“I grew up drinking Kool-aid as a kid and they like flavored coffee and craft beer,” she said.

Watkins said roughly two years ago beer makers were tired of losing share to wine and spirits with sweeter flavor profiles. She said this is when they began to innovate with more flavored beer such as hard lemonade and seasonal brews.

She said Wal-Mart has traditionally sold beer and wine in the back of the store, but Millennials see that as inconvenient, so they began making other choices for that product. When the retailer moved the adult beverages out front, Watkins said they noticed more beer and wine sales. 

“When they are in the store getting their other items, if they see the beer, they buy it,” Watkins added.

In Wal-Mart’s recent earnings call new Walmart U.S. CEO Greg Foran said improved adult beverage sales were part of the reason sales and traffic comparables were up 5.6% and 4.1%, respectively, in the quarter at its smaller Neighborhood Market formats.

Other adult beverage companies that have already set up shop in Northwest Arkansas include Anheuser-Busch, Constellation Brands, MillerCoors and Pabst Brewing Co.

For realtors and mortgage loan officers fearing the impacts of Van Buren's loss of eligibility for the Rural Development Loan program, it appears the city and others across Arkansas have been given a one year extension before any changes occur.

The news came from U.S. Sen. Mark Pryor, D-Ark., who released a letter from Department of Agriculture Secretary Tom Vilsack granting Van Buren, Russellville, Cabot, Paragould and Searcy an extension for the program.

According to a press release from Pryor's office, "USDA Secretary Tom Vilsack agreed to provide a one-year delay on 'rural in character' designations pertaining to a rural housing program that enables low-income Arkansas the opportunity to become homeowners."

News first came in late July that Van Buren would lose eligibility for the loan program, which allows individuals meeting requirements to be able to purchase a home for no money down.

Vickie Davis, an agent with Sagely & Edwards Realtors in Fort Smith, told The City Wire that eligibility requirements state that a community with no more than 35,000 residents must not be considered part contiguous part of a metropolitan statistical area. If the Arkansas River did not divide the two cities, Van Buren would be a contiguous neighbor of Fort Smith and is included in the MSA.

A meeting held July 31 at the USDA's office on Brooken Hill in Fort Smith featuring USDA State Director Lawrence McCullough, confirmed the loss of the loans for the community of 23,000.

Pryor criticized the USDA decision to eliminate Van Buren and the other Arkansas communities.

"USDA was out of bounds in denying these communities access to rural housing programs. Suspending its actions is the right thing to do. It allows Arkansas households to continue to benefit from this successful housing program and provides time for stakeholders to be part of the decision-making process,” said Pryor. “I appreciate Secretary Vilsack’s willingness to ensure the ‘rural in character’ designations are done right.”

Vilsack, in a letter to Pryor, said "work on determinations and any designations that would make a place ineligible solely based on 'rural in character' criteria" would be delayed until Sept. 30, 2015, ensuring another year of eligibility for the five communities in question.

"As you (Pryor) noted, USDA's rural housing programs provide many very low- and low-income rural Americans the opportunity to become successful homeowners. Therefore, "rural in character" designations have a direct impact on the lives of individuals, well-being of households, and housing options in communities across the country. I welcome this opportunity to review decision-making processes related to 'rural in character' determinations," Vilsack wrote to Pryor.

He said factors included in determinations "typically include population, density, and other data, some of which is subjective, as well as feedback from the public and stakeholders."

During the one year suspension, Vilsack said he would direct the Rural Housing Service (RHS) to "review and modify its determination procedures." Vilsack said situations like the Van Buren meeting would be addressed during this year-long suspension.

"RHS will also evaluate and standardize its communications processes to ensure there is appropriate opportunity for public comment and consideration before final designations are issued," he wrote.

Following is the full text of Vilsack's letter to Pryor:

"Thank you for your letter of August 5, 2014, concerning "rural in character" designations and the impact these designations can have on communities' eligibility for benefits under Department of Agriculture (USDA) Rural Housing Service (RHS) Section 502 Single Family Housing direct and guaranteed loan programs. In response to your concerns and others recently voiced, through September 30, 2015, I am suspending work on determinations and any designations that would make a place ineligible solely based on "rural in character" criteria.
 
"As you noted, USDA's rural housing programs provide many very low- and low-income rural Americans the opportunity to become successful homeowners. Therefore, "rural in character" designations have a direct impact on the lives of individuals, well-being of households, and housing options in communities across the country. I welcome this opportunity to review decision-making processes related to "rural in character" determinations.
 
"Factors considered in making "rural in character" determinations typically include population, density, and other data, some of which is subjective, as well as feedback from the public and stakeholders. Final "rural in character" designations are made at the discretion of State Offices, which have ready access to local information and residents, as well as knowledge of community characteristics. To ensure the reasonableness of these designations, the RHS program handbook (HB-1-3550 Paragraph 5.3C) directs State Offices to notify the public of any designation changes proposed.
 
"As stated above, through September 30, 2015, I am suspending work on determinations and any designations that would make a place ineligible solely based on "rural in character" criteria. During this suspension, RHS will review and modify its determination procedures. RHS will also evaluate and standardize its communications processes to ensure there is appropriate opportunity for public comment and consideration before final designations are issued. Absent further legislative changes, all other eligibility updates resulting from the newly enacted "rural area" definition in the 2014 Farm Bill will proceed for fiscal year 2015; on October 1, 2014, RHS will update the program area eligibility maps with only those changes unrelated to "rural in character" ineligibility determinations.

"Thank you again for sharing your concerns on this matter and for helping to make USDA's housing programs a success."

Texas-based Plains All American announced Thursday that it plans to build a 440-mile, 20-inch crude oil pipeline across Arkansas, running from the company’s terminal in Cushing, Okla., to the Valero Corp.’s 195,000 barrels per day refinery in Memphis.

Plains said it will invest nearly $900 million in the so-called Diamond Project, which will provide capacity of up to 200,000 barrels of domestic sweet crude per day. The pipeline, which will also give the Texas midstream operator access to Valero Energy Partner’s pipeline system in the Memphis area, is expected to be completed in late 2016.

Since acquiring the Memphis refinery from Tulsa-based Mapco in 2005, refinery giant Valero said it has invested more than $245 million to upgrade the facility. The refinery primarily processes low-sulfur content, light, sweet crude oil that produces regular and premium gasoline, diesel, jet fuel and petrochemicals.

With a direct connection to Plains’ Cushing in central Oklahoma, Valero gains access to the nation’s largest crude oil storing facility. Cushing is one of the world’s largest trading hubs for West Texas Intermediate, the highly sought-after light sweet crude that serves as the benchmark for oil pricing on the New York Mercantile Exchange.

Plains said the Diamond Pipeline project is strengthened by a long-term shipping pact it has with Valero and a related contract for storage and terminal services at the company’s Cushing facility. Valero also holds an option until January 2016 to become a partner in the Diamond Pipeline and purchase a 50% stake in the project.

Construction of the pipeline will also enhance the refinery’s long-term ability to produce gasoline, diesel and jet fuel for the greater Memphis and eastern Arkansas area, Plains officials said.

Plains announces this deal at a time when Wall Street is closely watching pipeline companies and other midstream operators that transport or are involved in the transportation, storage, and wholesale marketing of crude or refined petroleum products. The increased production of crude oil and natural gas from U.S. shale plays, including Marcellus, Eagle Ford, Bakken, Woodford and Fayetteville development in Arkansas, has put huge pressure on U.S. pipeline and midstream operators to keep up with capacity.

For instance, the U.S. Energy Information Administration forecasted last week that U.S. total crude oil production will averaged an estimated 8.5 million barrels per day (bbl/d) in 2014 and 9.3 million bbl/d in 2015. The 2015 forecast represents the highest annual average level of oil production since 1972. Natural gas plant liquids production is expected to increase from an average of 2.6 million bbl/d in 2013 to 3.1 million bbl/d in 2015.

The increased domestic production of crude oil and natural gas from U.S. shale plays has also contributed to a significant decline in U.S. dependence on imported oil from places like Saudi Arabia, Iraq and Venezuela.

The total share of U.S. petroleum and other liquids consumption met by net imports fell from 60% in 2005 to an average of 33% in 2013, the EIA said. The Department of Energy statistical arm said it expects the net import share to decline to 22% in 2015, which would be the lowest level since 1970.

In addition, Kinder Morgan announced a recent $70 billion tax-friendly deal to bring all of its energy assets under one corporate umbrella. Like Plains, Kinder Morgan is a public traded, master limited partnership that owns and manages midstream energy infrastructure across the U.S.

Kinder Morgan said its deal will “be a valuable acquisition currency and have a significantly lower hurdle for accretive investments in new energy infrastructure.”

“In the opportunity-rich environment of today’s energy infrastructure sector, we believe this transaction gives us the ability to grow KMI for years to come,” company chairman and CEO Richard Kinder said.

Like rival Kinder Morgan, Plains also owns an extensive network of pipeline storage and gathering assets in key crude oil and natural gas producing shale plays, transportation corridors and major market hubs in the U.S. and Canada.

Once its deal is completed at the end of the year, Kinder Morgan-owned subsidiaries will have a stake in or operate nearly 80,000 miles of pipelines and 180 terminals across the U.S.

Plains said it moves over 3.5 million barrels per day of crude oil and natural gas products on its pipelines.

Both pipeline giants are based in Houston.

Mercy Fort Smith officially opened its newest $5.3 million clinic on Cliff Drive Thursday (Aug. 21) and with it, took the next step forward in its efforts to expand the use of technology in medicine, but may not be enough to close the gap on a doctor shortage.

Matt Keep, chief operations officer of Mercy Fort Smith, said the new Cliff Drive clinic was essentially "plug and play ready."

"The rooms were built to be big enough to accommodate that type of setup and all the cabling and wiring is there for it. So we can go live on that when that becomes developed and available. We won't have to do any retrofitting or anything like that down the road. It's ready to go now."

Having rooms ready for telemedicine will bring new specialties to Fort Smith patients through the cooperative efforts of Mercy Health System hospitals across Arkansas, Missouri, and Oklahoma using Mercy's new Virtual Care Center under construction near St. Louis.

The care center, expected to be complete in 2015, brings doctors of all backgrounds into Fort Smith and other communities to treat a variety of ailments, Mercy Primary Care Medical Director Dr. Sean Baker said.

"They can use the data, they can work in conjunction with other physicians in that location to get the data they need to help make a diagnosis for that patient. Sometimes that patient may have to travel outside of the community for service (such as surgery), but when they get back to this community, they can revisit with that doctor after that service. So virtual care allows us to bring things to Fort Smith that Fort Smith probably never have access to otherwise. They can do it right here in this clinic," Baker explained.

As for how telemedicine works, Baker said essentially doctors use technology to see what is happening with a patient's body in real time.

"We have the ability to listen to hearts from a distance and digitally record that sound. We have the ability to send information electronically, like ultrasounds. Even looking in someone's ears can be done remotely. It's very neat how that technology works. It doesn't take away the need for that person to person contact, but with consultation and working as a team, we can achieve those needs with virtual medicine."

Baker and Keep were frank when discussing the doctor shortage Fort Smith has experienced, with Keep going so far as to say that even with the addition of a clinic on Dallas Street last year, the new Cliff Drive clinic officially opened for business Thursday and a clinic under construction at Waldron and Free Ferry Roads, it would not be enough to alleviate the region's doctor shortage.

"The best way to get access even to our specialists or those virtual specialists is by having a robust primary care base. You're going to have to do that. And we don't right now in our region. It's not just Fort Smith but all around us, as well. We're making a dent now, but you look back at the past maybe 10 years we probably had more doctors retiring or leaving than were actually coming in," Keep said.

"I think what we're doing now is we're probably adding more than we're losing now. So I guess we've got positive momentum. Is it enough to close the gap? Probably not. That's probably why virtual care and these other things are going to have to come into play. But we're certainly making a dent in it."

Even though the healthcare system in the region is underserved due to shortages, it is becoming more efficient thanks to technology, Baker said.

The primary way it is able to be more efficient is thanks to the use of electronic medical records, which centralizes a patient's records for the entire Mercy system in a single cloud-based system that updates immediately as procedures are completed, medications are prescribed or action is needed for a patient.

"Before we had this, you would have to wait on faxes or phone calls and sometimes that wouldn't happen that day. Sometimes it might not happen for a couple of days before you got the information and knew someone had been seen somewhere else. Sometimes it wasn't until you saw them in followup,” Baker said.

The improved technologies and efficiencies have allowed Mercy to improve its patient capacity to higher and higher levels, as well.

At the Dallas Street clinic, for example, Keep said it was seeing about 1,500 patients per month when it opened last year. Today, it sees 3,000 patients per month. The hospital itself is also seeing record patient load necessitating the need for technology to improve care and efficiency that will be on full display for patients using the clinic and its 24 exam rooms on Cliff Drive. And he said that would continue with investment in additional clinics and technology.

The Cliff Drive location is equipped for between eight and 10 providers and houses three family medicine providers, as well as an internal medicine specialist.

The planned Arkansas Colleges of Health Education presented the first renderings of the layout of its proposed $60 million college of osteopathic medicine at a meeting of the Fort Chaffee Redevelopment Authority on Thursday (Aug. 21).

Kyle Parker, ACHE president and CEO, presented the plans as an update to the FCRA, which donated the school's 200 acres in what is now known as Chaffee Crossing, across the street from the proposed site of a third Fort Smith high school near Chad Colley Boulevard.

The update was the first glimpse inside preliminary plans for the planned osteopathic school, which has increased from a plan for 60,000 square feet to 100,000 square feet which would house a planned physicians assistant program that could take on its first group of students in 2018, only two years after the planned opening of the osteopathic college.

On the first floor, Parker noted that students would have access to two 200-seat auditoriums, as well as group study areas.

"These are set out for the students to go in. A lot of (teaching) is done in group sessions in medical school. That's where they will do a lot of breakouts, the students themselves," he said.

The first floor will also contain "a library that won't have a book in it," Parker said.

"Everything is totally electronic. There will be access to over 60,000 electronic books and periodicals in here and these are some study areas," he said.

All instructional areas on the first floor, Parker said, would be recorded for reference by students of the osteopathic school, adding a touch of technology that is becoming more and more common in academic settings.

"Everything is recorded, both audio and visual. Everything is recorded and can be brought up on iPads or iPhones, accessible anywhere in the world. All of that can be reviewed in the student study group areas when they are preparing themselves for examinations."

The first floor will also house a cafeteria area, as well as academic and administrative offices and support areas, such as loading areas for cadavers. The second floor will house cooling units where cadavers are stored, as well as the secured lab where only instructors and students will have access due to HIPPA restrictions, which Parker said do not end until an individual has been buried.

"There's 21 tables in here where the donors are dissected, worked on," Parker explained as he described what cadavers would be used for in the learning process.

Instructor offices outline a large portion of the second floor, which also includes an "simulation lab." According to Parker, the four room is the home of life-like mannequins that cost about $90,000 each and allow students to get first-hand experience in administering drugs, setting broken bones and dealing with medical emergencies.

"We'll have five of those - a man, a woman, an infant, a toddler and a woman that has a baby. These are the top of the line because of the gift we got from a family. These will bleed, they'll have heart attacks, they'll break bones, you can actually inject them."

The software to run the mannequins, he said, runs $600,000.

Additional space on the second floor will include exam rooms where students will be examined on their ability to diagnose and treat patients, who will actually be actors from the community hired by the school.

The third floor will house the planned physicians assistant program tentatively scheduled to take its first students in 2018, as well as 7,000 square feet for research and additional space for administrative offices.

Parker presented not only an update on the building of the campus, which he said would be built by two local construction management firms working together (he has declined to name the firms at this time), but also a timeline for construction.

He said bulldozers should start working on the site Sept. 15, which would get the site pad ready for construction in January 2015.

A planned completion date of April 2016 is scheduled, with a move in scheduled for July 2016. Classes for the proposed osteopathic school are tentatively scheduled to begin in Aug. 2016.

The cost of the building parker discussed Thursday is between $21 million and $23 million, which he said ACHE would use cash to pay for. He also said cash reserves had been set aside to meet accrediting agency requirements.

Around the time construction begins in January, Parker said the school would be prepared to announce its deans. He said many were already hired, though announcements could not be made until the individuals had fulfilled their current contracts at other medical schools.

Once work begins and the school eventually opens, Parker said the impact will be felt with an economic impact of $75 million to $100 million per year.

Final artist renderings could be released within the next seven to 10 days, Parker said, adding that the exterior "skin" of the building was still being designed.

A tax reform issue and a stronger infrastructure bill await Congress when it returns from its summer recess early next month, U.S. Sen. John Boozman, R-Ark., told the state’s mayors Thursday (Aug. 21).

Boozman spoke to about 50 mayors during the Arkansas Municipal League Executive Committee meeting at the Hilton Garden Inn in Jonesboro.

The tax issue is the so-called Marketplace Fairness Act, which would help cities and counties collect sales taxes from online purchases, officials said at the meeting. Boozman said the issue is multi-faceted.

“The issue is critical to cities, but also to small business,” Boozman said.

Boozman noted that the average sales tax in Arkansas is nine percent, with the compliance time for businesses dealing with the tax even more frustrating. He said that a test vote in the Senate earlier this year on the bill during a so-called “Vote-a-Rama’ session was successful.

The bill would likely be brought up in a lame-duck session of Congress, after the November general election, Boozman said. The bill would also likely be tied to a continuation of a ban on Internet taxes that is working its way through the House.

Boozman took a question from Little Rock Mayor Mark Stodola, about the Internet tax bill’s future in the House. The bill would likely be subject to strategy and compromise as legislators look at the bill, Boozman said. After the presentation, Boozman sat down with Talk Business and Politics to discuss the issue.

He said technology has changed a lot of the dynamic in everyday life, even in commerce.

“Both (Marketplace Fairness and the Internet tax ban) are important. If you would have asked me 10 years ago, I would have said no because the Internet was in its infancy,” Boozman said. “But the trend is great. But as it has developed, we have had a whole generation raised on the Internet. There must be a cost comparison and competition, but it also must be fair.”

Earlier this week, opponents of the Marketplace Fairness Act — the National Taxpayers Union and R Street Consultants — released poll results from Arkansans on the issue.
The polling firm, Mercury Polling, surveyed 400 likely Arkansas voters on June 1-2, 2014, and found that only 28% supported a measure to make online retailers collect sales taxes on Internet purchases, while 59% opposed.

The U.S. House version of the bill has been pushed by U.S. Rep. Steve Womack, R-Rogers. Womack said in a June 2013 interview with The City Wire that his bill is not a new tax.

"If this bill passes, it has no affect on people whatsoever until a state takes action," he said. "It doesn't raise any revenue, it doesn't raise a red penny. It just empowers the states to collect the taxes that are due that have been legally implemented."

Officials with Sparks Health System announced Thursday (Aug. 21) a push to hire 50 nurses before Halloween as part of an effort to expand surgical and critical care services and better manage overall growth in demand.

Shelly Cordum, the chief nursing officer for Sparks in Fort Smith and Summit Medical Center in Van Buren, said Sparks plans to soon add 32 beds for medical and surgical patients and at least 10 beds for critical care. Franklin, Tenn.-based Community Health Systems is the parent company of Sparks and Summit.

Positions open for nurses include Licensed Practical Nurses (LPN), Registered Nurses (RN) and unit assistants. Part of the effort to recruit new nurses and retain existing nurses is a tuition reimbursement package up to $5,000 for those pursuing a nursing career and up to $2,500 for those seeking a college degree in other fields.

“We’re very blessed right now that we are expanding and we have some very good programs” that help nurses grow their careers, Cordum said in an interview with The City Wire. “We really want to offer this to people so they can have true career growth with us.”

Pay for LPNs with several decades of service can total around $70,000, not including pay for certain types of shift work and other benefits. For nurses with two years or more experience and certain qualifications, the pay can total more than $50,000 a year. A unit assistant could start at around $20,000 a year.

Cordum said the regional health system has 824 registered nurses, 139 LPNs and 144 unit assistants. She said the more than 1,100 nurses are busy keeping pace with a system that saw more than 6,700 people cycle through the emergency room in July, and the growing number of people accessing healthcare now that insurance is available to more residents.

“We do team nursing at Sparks because it takes a team to take care of people nowadays because they are sicker than they have ever been,” Cordum said, adding that people who previously did not have health care coverage are entering medical systems and they are often “really, really sick.”

Cordum said the hospital system, like most systems around the country, must do more to attract and retain quality employees. Part of that for Sparks is offering flexible work schedules allowing nurses to work over the weekend and be free most of the week.

“You have to be creative on that work-life balance,” Cordum said.

Younger generations also have a different concept of work. Younger nurses who can travel may work a year or two at one hospital and then travel to a hospital in another city and repeat that for several years.

“The younger generation, they do like to travel. ... They don’t pick an employer and stay with them for 20 or 30 years,” she explained.

Cordum, who moved to the Fort Smith area in September 2012 and has been in the medical field since 1982, said nurse turnover at the hospital system ranges between 5% and 8% a year, which she said is “very average” in the nursing field.

The medical field has been a growth sector in the Fort Smith region, although in recent years employment has been inconsistent. In Education & Health Services, employment was 16,300 during June, down from 16,500 in May and below the 17,000 during June 2013. Annual average monthly employment in the sector has steadily grown since 2005 when it reached 14,000. In 2012 the average was 17,000, but fell slightly to 16,800 in 2013. Employment in the sector reached a record 17,300 in October 2012.

The Sebastian County Election Commission took action Friday (Aug. 22) to be in compliance with state election laws following an attorney general's opinion that stated the commission erred in a previous vote to close specific polling locations.

The opinion by Attorney General Dustin McDaniel, D-Ark., stated that without a unanimous vote of the commission, a polling location could not be closed.

Previous votes by the commission to close polling sites at WestArk Church of Christ, Haven Heights Baptist Church, New Providence Church, Sacred Heart Church, the Barling Senior Center and a polling site in Bloomer were not unanimous.

While McDaniel's opinion stated that elections, including the primary, were still valid, the commission took steps to right the wrong Friday.

A vote was first taken to re-open all the sites, with each then being voted on individually.

The sites closed by a unanimous vote were WestArk Church of Christ, Haven Heights Baptist Church and the Barling Senior Center. The other sites were left open.

Election Commissioner David Damron was the sole no vote on closing Bloomer and New Providence, with Election Commission Chairman Lee Webb and Election Commissioner Rita Howard Watkins voting to close the sites.

The only polling site up for a vote to draw protest was the site in Bloomer, where local residents and Rep. Charlotte Douglas, R-Alma, whose district includes Bloomer, spoke to the commission in an effort to save the site.

"This one from Bloomer Baptist Church to Union Baptist Church is a little over 9.1 miles, but it takes a little over 17 minutes to make that 9.1 miles because of the winding, curvy road which isn't in very good shape," said resident Bill Warren.

Webb said the decision to close the Bloomer site and consolidate at Union Baptist Church was partly due to the budget handed to the commission by the Sebastian County Quorum Court.

But resident Jeff Stubblefield said the sites should be chosen based on servicing citizens and not based on money.

"Polling sites are for the people. We're not in the money making business at a polling site. All of us want to be able to vote in the most least-restrictive (way)," he said.

Webb said there were also issues with compliance at Bloomer Baptist Church regarding compliance with the Americans With Disabilities Act.

As a solution, Douglas said an alternate polling site had been found less than a mile away at Bloomer Free Will Baptist Church. A representative from the church was at the meeting to speak on the issue and Webb said consideration of the church as an alternate would have to be discussed at a future meeting.

In other business, the commission certified the Fort Smith Public Library's millage election with a final vote count of 1,544 voting to increase the millage from one mils to three and 2,744 voting against the increase.

The commission oversaw the drawing of ballot positions for the November general election following adjournment of its meeting.

The Fort Smith Regional Airport Commission approved a contract Tuesday (Aug. 26) with Pro-Tec Fire Services to provide firefighting protection and rescue services at the airport beginning Oct. 1.

The contract, at a cost of $251,000 during its first year and $258,000 during its second year, has three one year options to extend the deal between the commission and the company.

"This agreement provides for Index B ARFF coverage with one firefighter on shift everyday for 18 hours and a supervisor Monday - Friday during normal duty hours, who will act as the airport's primary point of contact and incident commander," airport Executive Director John Parker wrote in a memo to the commission on Aug. 21.

The company would essentially operate as its own body without oversight from the airport commission, Parker said. Should commercial or charter air traffic requiring ARFF coverage land at the airport outside of coverage hours, he said arrangements would be made with the airline or charter service requesting coverage that would begin 15 minutes before landing and would last until 15 minutes following departure.

ARFF (aircraft rescue and fire fighting) has been handled by the 188th Wing during the last 20 or more years at the airport, but with the manned flying mission having left the squadron, the firefighting mission it has hosted during that time will also depart. The last scheduled day of ARFF coverage by the 188th is Sept. 30.

And while Pro-Tec and the commission have come to terms for the contract approved Tuesday, they have yet to enter into a formal contract with the National Guard Bureau out of Washington, D.C., to utilize ARFF equipment in use by the 188th.

Original plans called for the airport commission to host its own firefighting mission using firefighters hired and paid by the commission, but efforts to hold the National Guard Bureau to verbal agreements made earlier in the year at a meeting at Dallas/Fort Worth International Airport involving the Bureau, the airport commission and the Federal Aviation Administration went nowhere for months.

It was only recently that the Bureau and the airport began negotiating terms on the use of equipment and a firehouse on land leased by the 188th from the airport commission. But with the delay, the commission was feeling the pressure of possibly not having the Guard equipment to fall back on, meaning it needed to start meeting with companies who could provide full services — including firefighting equipment — on day one.

Parker said during Tuesday's meeting that contact with the National Guard Bureau has now returned to regularity and a deal for equipment use is being worked out.

As a part of the plan to use National Guard equipment, Parker said a recent FAA inspection of the airport also included the additional inspection of vehicles to be used by Pro-Tec in its firefighting mission for the commission. The inspection of three vehicles showed that two were ready for service, according to FAA regulations.

A contract with the National Guard Bureau should be complete within weeks with a transfer of equipment sometime during the last week of September, Parker said.

The city of Fort Smith will make the leap into the modern age in September with the launch of livestreams – video of event available via the Internet – of Board of Directors meetings.

Russell Gibson, director of Fort Smith's information technology department, said the plan for offering streams of regular meetings has been on his department's radar for the better part of a year, but has taken a back seat to other IT needs, such as the launch of the new My Fort Smith mobile phone app.

The challenge, Gibson said, has been working with infrastructure at the Fort Smith School District's school services center on Jenny Lind Road. City Board meetings are held at the site since the city does not have its own Board meeting room within a city-owned complex.

"You know, unfortunately since we don't have our own city hall or facilities, we have to work with other folks in terms of consuming their services," he explained. "We're fortunate that the school system's been very generous and helpful as far as meeting our technology needs, especially with the television broadcasts and now with the separate (project) we're going to undertake with the stream."

According to Gibson, the school district is allowing the city to use its Internet signal to stream the meetings.

"They are going to give us a drop there and we talked about using their WiFi signal. In talking to the school folks, they're actually going to let us plug right into their network. They've been very generous with their time and resources. And we'll use that infrastructure to get the signal up to the Internet."

For residents who do not subscribe to Cox Communications' cable service, where the Board meetings are broadcast live on the city's community access channel, the new livestream will be viewable on FortSmithAR.gov and on mobile devices.

The service used to broadcast the stream to the public will be UStream, Gibson said, explaining that tests of the streaming service will begin Sept. 2 before the official go-live date of Sept. 16.

Costs for the streaming service will likely be less than $1,000 annually, he added, with little in the way of staffing to manage the streaming service.

"Our hope is we'll enlist either one of the staff from 777 Productions (the company that produces city Board meeting broadcasts on cable) to simply hit 'Go Live' on the equipment and send the signal up that way, or perhaps (City Clerk) Sherri (Gard) or someone. Worst case, it would be a staff from ITS there for the duration of the meeting. Again, that's sort of the logistics testing part we're going to work out to make sure everyone's singing from the same hymn book, so to speak."

For residents unable to attend a meeting or watch it live online or on the community access channel on Cox, Gibson said videos of meetings are and will continue to be available on the city's website under the "Board of Directors" section.

As for special meetings or study sessions, there is a possibility of adding streams of those meetings, Gibson said, though he said it would likely be only after requested by the Board.

To do so, the IT department would utilize a webcam in order to broadcasts since it would not have broadcast-quality cameras now in use at regular Board meetings held at the Fort Smith school service center. Study sessions are typically held at the Fort Smith Public Library, though meetings are occasionally held at the Southside Senior Center and the Elm Grove Community Center.

"Yes, the possibility would exist (to add study sessions and other meetings in the future) if it's ever requested," Gibson said. "Of course, we work at the pleasure of the Board and administration, so if that request ever were to come or due to public demand, then obviously we want to be at the ready and not have to start from the beginning. That's why we're also going to test with a webcam (even though broadcast cameras will be used for regular city Board meetings)."

In the region, the only other city to livestream city council meetings is Fayetteville.

Tyson Foods is moving toward closing its acquisition of Hillshire Brands but has again had to extended its tender offer of $63 per share on the $8.55 billion deal from. Tyson Foods noted in a release Tuesday (Aug. 26) that it expects the deal to close by Sept. 27. Some 53% of shares have already been tendered. Analysts agree the deal will likely pass regulatory muster despite some concerns from the pork industry about lost production.

Tyson was notified Wednesday (Aug. 27) by the U.S. Department of Justice that it must divest Heinold Hog Markets, its sow purchasing business, in order to get DOJ approval. The department said that without the required divestiture the transaction would have combined companies that account for more than a third of sow purchases from U.S. farmers, likely reducing competition for purchases of sows from farmers.

State attorneys general from Illinois Iowa, and Missouri joined the department in the civil lawsuit filed today in the U.S. District Court for the District of Columbia to block the proposed transaction. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the competitive concerns alleged in the department’s lawsuit.

“Farmers are entitled to competitive markets for their products. Today’s proposed settlement will help ensure that hog breeders in the United States will continue to receive the benefits of vigorous competition when selling sows,” said Bill Baer, Assistant Attorney General in charge of the Antitrust Division. “Without the divestiture, the proposed acquisition would have eliminated a significant customer for farmers’ sows and likely would have resulted in less competition in this important agricultural market.”

Neither Tyson, nor Hillshire management, have disclosed what their combined operation will look like geographically and if there are plans to shutter or sell off any of their processing facilities spread across 11 states.

Hillshire's meat-related operations include:
• Kansas City, Mo., (sliced lunchmeat processing);
• St. Joseph, Mo., (sliced lunchmeat, hot dogs and links);
• Zeeland, Mich., (deli and breakfast bowls);
• Storm Lake, Iowa (Turkey production and processing);
• San Lorenzo, Calif., (Aidells Sausage and specialty meats);
• Rancho Cucamonga, Calif., (Golden Island Jerky);
• New London, Wisc. (sliced lunchmeat, smoked sausage and hot dogs);
• Newbern, Tenn., (sausage);
• Haltom City, Texas (corn dogs);
• Florence, Ala., (sausage);
• Claryville, Ky., (sliced lunchmeat, cocktail wienies and hot dogs).
• Rome, Ga., where Nature Valley Granola is manufactured;
• Vernon, Calif., Van's Natural Foods plant;
• Traverse City, Mich., Chef Pierre pie-manufacturing plant.;
• Tarboro, N.C., Sara Lee plant produces frozen cakes, croissants, muffins and cobblers.

Tyson recently announced the closure of three of its prepared foods manufacturing plants in Cherokee, Iowa; Buffalo, N.Y.; and Santa Teresa, N.M., citing the need for improved efficiencies as the plants tagged for closure were outdated. Tyson is shifting some of the production to more efficient plants. The Cherokee plant is slated for closure Sept. 27 and the other two are expected to wind down operations in the first half of 2015. An estimated 950 jobs are being eliminated with these closures.

BUSINESS TRANSFORMATION
The Springdale-based meat giant also sold its commodity businesses in Mexico and Brazil to competitor Pilgrim’s Pride, whose parent company JBS is based in Brazil.

“These recent moves by Tyson make sense,” said Steve Kay, publisher of Cattle Buyers Weekly. “The sale of the Latin American business simplifies things because they will have so much on their hands with this Hillshire acquisition. The plant closures of the underperforming sites is another way Tyson is getting ready for the transformation in their business. ... They began preparing for this Hillshire deal more than year ago. Dipping their toe in the water with several small prepared foods acquisitions (Boscos Pizza, Don Julio Foods and Circle Foods) while they spent time reviewing Hillshire’s business,” Kay told The City Wire.

Aside from the plant closures already announced, Kay does not expect to see much manufacturing overlap when the merger is completed.

Wall Street analysts expect Tyson might sell off a few of the ancillary businesses within the Hillshire portfolio such as the confectionary Chef Pierre pie and the frozen Sara Lee brands. There is a plethora of merger and acquisition demand in the packaged food sector given cheap money and a thirst for market share. The companies themselves have not commented on these possibilities.

Not everyone is convinced that Tyson’s manufacturing footprint won’t need more tweaking once the deal is complete.

“We find it a bit disconcerting that the fiscal year 2015 plan hinges so heavily on the expectation that two Tyson divisions, Chicken and Prepared Foods, will deliver record results even though they just missed expectations in 3Q due to supply chain problems at antiquated production facilities. Manufacturing problems don't get solved overnight, and it sounds like the company needs to do some heavy lifting within their footprint to get back on track,” Credit Suisse analyst Robert Moskow noted in a July 28 report to investors.

PROCESSING HICCUPS
Moskow is concerned about the non-recurring items mentioned in the recent quarter restricting the company’s chicken margin by 1.5% to 2%.

“There were a few things that happened in the quarter at manufacturing facilities that contributed to lower volume. The company suffered a fire in one of its fully cooked processing plants in February. The damage was more extensive than the company thought and it impaired their ability to provide adequate supply. Management said the repairs have been completed and the plant is back on line. In addition, a second fully cooked processing plant had some operational issues related to outdated equipment. This also significantly impacted volumes. Management said the new equipment has been ordered and the they expect to return to full production volume by first quarter of 2015,” Moskow said.

Tyson has agreed to buy meat on the open market at expensive prices to fill its customers’ orders. Tyson execs said this strategy will continue going forward.

“The supply chain issues coupled with the higher input prices amount to a chicken margin impact of 1.5% to 2% in the back half of the year,” Moskow notes.

FUTURE GAINS
Tyson and Hillshire Brands will create the biggest meat company in the world with some $40 billion in combined annual revenue once the deal is completed.

Kay said Tyson bet the farm on a deal that has the potential to radically transform its business model from the fresh meat business into a higher margin retail packaged food company like Hormel. He said the deal can be summed up in three words: Brands, breakfast and margins.

Tyson reported that the combination of assets will accelerate its growth in the coveted $1 billion breakfast-food category, the fastest growing segment in the food sector. Tyson CEO Donnie Smith said combining the brand strengths of Wright Brand bacon and Jimmy Dean sausage make for a blissful marriage and growing market share. Aside from having a lock on breakfast meats, the Hillshire portfolio also expands Tyson’s reach into the cereal, gluten-free and granola markets with the Nature Valley brand and the recently acquired Van’s Foods.

Smith said the combined brands include four that are worth $1 billion or more. He said the combined companies will be the No. 2 player in the frozen retail category with $3.7 billion in annual sales, leap frogging over ConAgra Foods at $3.3 billion.

The biggest reason Tyson is eager to complete the Hillshire deal is the promise of higher operating margins, Kay said.

“In fiscal 2013, Hillshire had a net margin of 4.7 % versus 2.3% for Tyson. On an operating basis, Hillshire’s retail business had an 11.4% operating margin and its foodservice business a 7.3% margin,” Kay said.

Compare that Tyson’s overall operating margin of 4% in 2013 and Kay said it’s easy to see the attraction.

“Hillshire’s $404 million in operating income in 2013, and what will most likely be a larger number in fiscal 2014, obviously appealed a lot to Tyson,” he said.

RISK ASSESSMENT
Tyson’s eagerness to get this mega deal done is not without risks that the company publicly disclosed in an Aug. 7 filing with the Securities and Exchange Commission.

Tyson execs note that while they plan to achieve targeted benefits with the Hillshire acquisition, they realize that will depend largely on their ability to integrate the two different businesses.

“The necessity of coordinating geographically separated organizations, systems and facilities and addressing possible differences in business backgrounds, corporate cultures and management philosophies may increase the difficulties of integration. We and Hillshire Brands operate numerous systems, including those involving management information, purchasing, accounting and finance, sales, billing, employee benefits, payroll and regulatory compliance. Moreover, the integration of our respective operations will require the dedication of significant management resources, which is likely to distract management’s attention from day-to-day operations. Employee uncertainty and lack of focus during the integration process may also disrupt our business and result in undesired employee attrition. An inability of management to successfully integrate the operations of the two companies could have a material adverse effect on the business, results of operations and financial condition of the combined businesses.” Tyson noted in the filing.

Tyson also warned that cost savings and synergies could differ materially from earlier estimates and investors should not place undue reliance on those estimated cost-savings, which are $500 million over three years.

With respect to executive management, Tyson notes the accelerated vesting of equity-based awards and payment of “change in control” benefits to some members of Hillshire Brands’ management could result in increased difficulty or cost in retaining Hillshire Brands’ officers and employees.

EARNINGS OUTLOOK
Despite the the risks, Tyson management recently provided upbeat earnings guidance for fiscal 2015 with chicken margins of at least 10%, Hillshire synergies of $225 million in the first year and $500 million by year three, with $575 million in proceeds from the sale of the Latin American poultry segment.

On that note, Moskow raised his fiscal 2015 earnings guidance to $3.22 per share, still somewhat below the consensus $3.40 per share.

The target price for Tyson shares according to Moskow is $38. Shares of Tyson Foods closed Tuesday (Aug. 26) at $37.22, for 24 cents. Wall Street’s consensus target price is $46.13. During the past 52 weeks the share price has ranged from a $27.33 low to a $44.24 high.

The Fort Smith regional economy workforce, which appeared to be stabilizing during the past year, took a negative turn in July with a 4.14% decline. The number of employed in the metro fell 2.35% in July compared to July 2013.

The metro jobless rate rose to 6.5% in July compared to 6.4% in June, but was lower than the 8.2% in July 2013, according to figures released Wednesday (Aug. 27) by the U.S. Bureau of Labor Statistics. The July numbers are subject to revision.

The size of the Fort Smith regional workforce during July was 125,055, down from 127,049 during June, and well below the 130,458 during July 2013s. The labor force reached a revised high of 140,253 in June 2007, meaning the July workforce size is down 10.83% from the peak number.

The number of employed in the Fort Smith region totaled 116,936 in July, down from 118,964 in June, and an estimated 2,820 jobs below the 119,756 employed in July 2013.

All of the eight metro areas in or connected to Arkansas had jobless rate increases in July compared to June, but all had jobless rate declines compared to July 2013. During July, the lowest metro jobless rate in the state was 5.3% in Northwest Arkansas and the highest rate was 9.2% in the Pine Bluff area.

FORT SMITH METRO NUMBERS
Unemployed persons in the region totaled an estimated 8,119 during July, up from the 8,085 during June, but well below the 10,702 during July 2013.

The Fort Smith area manufacturing sector employed an estimated 18,100 in July, down from 18,400 in June, and down from 18,400 July 2013. Sector employment is down almost 36% from a decade ago when July 2004 manufacturing employment in the metro area stood at 28,500. Also, the annual average monthly employment in manufacturing has fallen from 28,900 in 2005, 19,200 in 2012, and to 18,300 in 2013.

Jobs in the Trade, Transportation and Utilities sector totaled 24,400 during July 2013, unchanged compared to June and above the 23,800 in July 2013. Employment in the sector reached a high of 25,700 in December 2007.

Employment in the region’s tourism industry was 9,800 during July, up from 9,700 in June and above the 9,500 in July 2013. The July numbers, if not revised, will tie a record for employment in the sector first set in August 2008.

In Education & Health Services, employment was 15,600 during July, down from 16,300 in June and below the 16,700 during July 2013. Annual average monthly employment in the sector has steadily grown since 2005 when it reached 14,000. In 2012 the average was 17,000, but fell slightly to 16,800 in 2013. Employment in the sector reached a record 17,300 in October 2012.

In the Government sector, employment was 16,500 during July, down compared to 18,800 in June and below the 16,500 July 2013.

NATIONAL NUMBERS
Unemployment rates were lower in July than a year earlier in 348 of the 372 metropolitan areas, higher in 16 areas, and unchanged in eight areas, noted the broad BLS report.

The U.S. unemployment rate in July was 6.2%, down from 7.3% from a year earlier. Arkansas’ jobless rate was 6.2% in July, down from 6.3% in June and down from 7.7% in July 2013.

Oklahoma’s jobless rate during July was 4.6%, up from 4.5% in June, and down compared to 5.6% in July 2013. The Missouri jobless rate during July was 6.5%, down from 6.6% in June and below the 6.8% in July 2013.

ARKANSAS METRO AREAS
Fayetteville-Springdale-Rogers
July 2014: 5.3%
June 2014: 4.9%
July 2013: 6.3%

Fort Smith
July 2014: 6.5%
June 2014: 6.4%
July 2013: 8.2%

Hot Springs
July 2014: 6.7%
June 2014: 6.5%
July 2013: 8.1%

Jonesboro
July 2014: 6.1%
June 2014: 6%
July 2013: 7.8%

Little Rock-North Little Rock-Conway
July 2014: 6%
June 2014: 5.8%
July 2013: 7.2%

Memphis-West Memphis
July 2014: 8.9%
June 2014: 8.7%
July 2013: 9.6%

Pine Bluff
July 2014: 9.2%
June 2014: 8.6%
July 2013: 10.9%

Texarkana
July 2014: 6.5%
June 2014: 6.3%
July 2013: 7.7%

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