An Arkansas legislative committee heard directly from employers and educators at the University of Arkansas at Fort Smith Wednesday (Aug. 27) about how they are partnering to meet the region's employment needs in innovative ways.

Rep. Terry Rice, R-Waldron, is co-chair of the General Assembly's Joint Performance Review Committee and said the meeting held at the Baldor Center on the UAFS campus was about bringing jobs to the entire region. Also attending the meeting were Sen. Jane English, R-North Little Rock, and Shane Broadway, director of the Arkansas Department of Higher Education.

"What it's all about is jobs and workforce service and changes that are going on. Everybody's going to have to be more efficient. One thing I've enjoyed about the idea of bringing it to Fort Smith, knowing some of the things from UAFS, they're doing more with less here than a lot of schools we see," Rice said.

Dr. Ken Warden, associate vice chancellor for workforce development at UAFS, said the partnerships the university has developed with local employers "drive our programs and curricula."

"You know, developing programs and stuff that do not result in employment is not what we want to. We have an obligation and responsibility to our graduates and their opportunities post-graduation. Working with the folks like those that spoke this morning and the other companies around the region to ensure that what we do as a university — whether short-term non-credit training all the way to a bachelor's degree — link to a job opportunity. And that's what we want to demonstrate today."

Jim Walcott, president and CEO of Fort Smith-based printing company Weldon, Williams and Lick, told the joint committee that a part of the reason his company has succeeded is a result of partnering with UAFS.

"WW&L being a test site for the latest digital press is not of use if WW&L does not have a capable staff willing and able to grow," he said. "UA Fort Smith has helped make that happen for us."

Walcott said the university had worked with the company to offer classes for his employees that would eventually lead to an associates degree with students only meeting on Monday evenings for a year. The training employees receive through the specialized program developed with UAFS allow them to get specialized training in a variety of areas from leadership to finance, growing beyond just being an individual who can push buttons on a press to employees who can lead.

"They (employees) did come to UA Fort Smith against their better wishes for a variety of reasons. They didn't think they were ready for college, didn't want to do it. But they began the classes and in fact, excelled. They're excellent leaders for us and we thank UA Fort Smith for that. We're happy (to have) UA Fort Smith here and willing to create the custom modules we need for us and for anybody else in the community. We appreciate the flexibility the legislature offers."

Judy McReynolds, president and CEO of Fort Smith-based ArcBest Corp., also spoke and said the university's degrees and classes were turning out graduates from truck drivers to marketing specialists who are meeting the needs of the growing company. The company this year announced the construction of a new corporate headquarters in Chaffee Crossing and the addition of 900 jobs in coming years.

"People said we're so excited you're doing that here but with the choices, why here? And I can honestly say that is because of the quality of the workforce that we're able to get in this area and that's in large part can be attributed to the students who are graduating from UA Fort Smith."

She said the "direct connection" between UAFS and ArcBest has allowed the company to "mold" some of the university's programs positioning students to take jobs at ArcBest right out of college.

Melissa Hanesworth, managing director at Pernod Ricard USA, pointed to the university's efforts to meet the needs of local employers such as the launch this fall of the university's robotics certificate program. She also pointed to UAFS bringing education and training to her employees instead of having to depend on those same employees making the effort of attending class on campus which she called "a strategic tool for our companies to continue to grow."

"Our supervisors did not have to come out and sit next to a 19-year-old and be nervous or sit in a three hour class they've never done or haven't done in many, many years. It was a 16-week on-site training class and they actually earned college credit for that course. For some it was their first, for some it was their first in a long time. And for some, it was not their last. They have chosen to continue their education and actually come out and start taking classes here."

UAFS Chancellor Dr. Paul Beran said the university's background as a community college has lead to today's emphasis on providing jobs and opportunities that feed the local economy. But he said in order for the university to meet its potential in meeting the needs of the community, additional funding could make a difference.

Adjusted for inflation, WestArk College would receive nearly $8 million more in funding than UAFS receives today, according to Dr. Elizabeth Underwood, executive director of government and community relations at the university.

"The more fully funded we are, the better we are able to hire quality faculty, quality instructors and be able to … attract the best people and keep the best people," Dr. Beran added.

But Rice said UAFS's ability to do more with less, as well as the partnerships it has developed with local businesses, is a model he expects to see at more Arkansas colleges in years to come. Asked if it was something he was prepared to push through with legislation when he enters the Senate next year, Rice said he was not looking for mandates.

"You use the terms force and mandate that I don't like, but that's what these meetings are about are change and about what's got to come to be able to turn out a product in a student traditional or non-traditional (format) that is ready to go to work. And like they say, they can have people hired out from under here before they even graduate and make good money and make good taxpayers out of them. What we need to do is make sure and be smart about how we're doing it. It's coming whether you call it mandated or forced, schools are going to have to be more efficient."

The average Arkansas home sales price may be down more than 2% for sales during the first seven months of 2014, but the number of homes sold is up almost 6% and the value of the sales are up 6.59%. It’s an impressive pace considering the gains posted in 2013.

Home sales in Arkansas’ four largest metro areas during the first seven months of 2014 totaled 12,504, up 5.63% compared to the same period in 2013, according to The City Wire’s Arkansas Home Sales Report. The average price per home sold in the four markets was $164,494, down 2.12% compared to the same period in 2013, and the total value of $2.056 billion in the four markets was up 3.38%.

The City Wire’s Arkansas Home Sales Report captures home sales data in the state’s 14 most populated counties within its four largest metro areas — Central Arkansas, the Fort Smith area, Jonesboro/Northeast Arkansas and Northwest Arkansas. The report, which records closed sales, accounts for between 70% and 75% of total Arkansas home sales.

Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas, said she is not surprised by the housing market numbers.

“I hate to sound like a broken record, but in the uncertain interest rate environment that we are in, unit gains will be on the positive side,” Deck said, explaining that consumers and investors likely are buying before interest rates increase.

JULY NUMBERS
July home sales totaled 2,193, up 7.03% in the four markets compared to July 2013, and up 31.24% compared to July 2012. The average price per home in the four markets during July was $174,858, up 0.48% compared to July 2013, and up 6.41% compared to July 2012.

There were 1,069 homes sold in central Arkansas, up 13.24% compared to July 2013, and up 35.49% compared to July 2012.

July home sales totaled 722 in Northwest Arkansas, down 0.69% compared to July 2013, and up 20.33% compared to July 2012.

Jonesboro area home sales totaled 214, up 4.9% compared to July 2013 and up 34.39% compared to July 2012.

In the Fort Smith area, home sales totaled 188, up 8.05% compared to July 2013, and up 52.85% compared to July 2012.

The total value of the sales during July were up 11.45% in central Arkansas, up 2.52% in Northwest Arkansas, up 14.56% in the Jonesboro area, and up 2.29% in the Fort Smith region.

THE REGIONAL PICTURE: 2014
Central Arkansas — Home sales
Jan.-July 2014: 5,958
Jan.-July 2013: 5,573
Jan.-July 2012: 5,069

Fort Smith area — Home sales
Jan.-July 2014: 1,133
Jan.-July 2013: 964
Jan.-July 2012: 926

Jonesboro area — Home sales
Jan.-July 2014: 1,289
Jan.-July 2013: 1,096
Jan.-July 2012: 970

Northwest Arkansas — Home sales
Jan.-July 2014: 4,476
Jan.-July 2013: 4,205
Jan.-July 2012: 3,573

The top five counties in terms of Jan.-July 2014 home sales:
Pulaski — 2,759, up compared to 2,596 in 2013
Benton — 2,615, down compared to 2,632 in 2013
Washington — 1,509, down compared to 1,573 in 2013
Craighead — 1,030, up compared to 865 in 2013
Saline — 964, up compared to 870 in 2013

Link here for a PDF document of the July 2014 data.

PRICES AND CONSUMER CONFIDENCE
Deck said there is enough uncertainty in the market that people are hesitant to jump in and buy homes unless they believe they are purchasing at price points that will hold value in the years to come. For that reason, Deck said there is downward pressure on prices and that will likely continue until consumer confidence picks up in response to a clearly improving economy and jobs market.

“Overall, the report is positive,” Deck said. “There is no reason to be too concerned. It looks like things are pretty well in balance.”

As for the July numbers, Deck noted there was a very slight increase in average sales prices in the areas covered. She said that is probably an anomaly and the year-to-year trend of falling prices more accurately describes market conditions.

Phillip Taldo, broker with Weichert Realtors, the Griffin Company in Northwest Arkansas, is confident in good numbers for the remainder of 2014.

“This summer has been flat. It really has not been extraordinary in terms of new home and existing home sales. But, this pace appears to be sustainable and that’s not bad given the record year in 2013,” Taldo said.

Taldo, also a new home builder, said that sales market slowed in the summer, but starts have been steady. Aside from a healthy relocation business, Taldo said the uptick in home prices and the low interest rates are giving more people an opportunity to sell their home and move up.

Mont Sagely, the principal broker and owner of Sagely & Edwards Realtors in Fort Smith, said the sales figures for the year in that market 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."

Whirlpool Corporation said in a statement Thursday (Aug. 28) that previously detected TCE contamination near a south Fort Smith Boys and Girls Club facility that originated at its shuttered facility posed no risk and was not detected in the majority of water samples taken at the club's property.

The company previously disclosed the discovery of trichloroethylene (TCE), a potentially cancer causing chemical used as a degreasing agent at Whirlpool's former Fort Smith manufacturing facility, in an Aug. 4 letter to the Arkansas Department of Environmental Quality. A revised work plan was proposed in the Aug. 4 letter, as well as testing on the Boys and Girls Club site and a site owned by the city of Fort Smith.

In a letter dated Thursday (Aug. 28), ENVIRON's Michael Ellis — Whirlpool's environmental consultant — said sampling and testing at the site found nearly no TCE contamination at the Boys and Girls Club.

"In summary, following a well-defined scientific process, no trichloroethylene (TCE) was found in any soil samples or in eight of the nine groundwater samples taken at the Boys and Girls Club property," Ellis wrote to the ADEQ.

"These results indicate that impacted groundwater only marginally extends beyond the boundaries of the Jenny Lind Road expansion project. The impacted groundwater is only beneath a small corner of the undeveloped piece of the Boys and Girls Club property that will be separated from the rest of the Boys and Girls Club property by the Ingersoll Avenue Expansion project."

Ellis added that no TCE was found in surface water samples taken from runoff originating at the Whirlpool site and flowing into a drainage ditch that flows along Jenny Lind Road beside the Boys and Girls Club's parking lot.

In a statement, Whirlpool Vice President Jeff Noel said testing completed by ENVIRON on Whirlpool's behalf to confirm only minimal amounts of TCE contamination were part of a "well-defined scientific process" and found "no health risk to anyone" using the Boys and Girls Club or playing in the non-profits fields.

"No TCE was found in soils, in drainage areas, or in 8 of the 9 groundwater samples taken on the Boys and Girls Club property. The only sample with TCE above detection limits was taken beneath an undeveloped area right near the road expansion, and even in this limited, isolated area, there continues to be no exposure pathway to TCE," Noel said.

He also said the company would continue with its efforts outlined in a revised remediation plan submitted to ADEQ to continue monitoring of the site.

"We will now be working with the Boys and Girls Club and ADEQ on the installation of four permanent monitoring wells in order to ensure that we have ongoing information about the situation in this area.”

Ellis said in his letter to the ADEQ that a request has been made of the club to allow the monitoring.

The discovery and subsequent testing came about following the discovery of additional levels of TCE at the northeast corner of the Whirlpool facility.

"A Final Northeast Corner Investigation Report will be prepared after the proposed monitoring wells are installed and sampled," Ellis wrote. "This future report will contain all documentation prepared for this investigation including logs for membrane interface probes (MIPs), soil probes and monitoring wells, and laboratory data reports."

According to Ellis, a copy of the report will be submitted to ADEQ, with a copy being provided to the Boys and Girls Club.

For the second month in a row, Fort Smith sales tax collections have surpassed the same month last year. But even with the increase in revenues, sales tax receipts are still below expectations for the year.

The city's sales taxes (1% for streets and 1% combined for water and sewer projects and fire and parks and recreation) collected $3.27 million in the July report. The figure is 1.26% above the same month last year, but 1.15% lower than budgeted.

For the first seven months of the year, revenue from the city's sales tax collections are up 1.46% from the same period last year but off budget by 0.95%, or $112,285 below projections.

The total in the July report represents a overall drop in all sales tax receipts of 0.49% below budget. (Because the state of Arkansas has a two-month delay in reporting collections back to the cities, the city of Fort Smith — for budgeting purposes — has historically reflected the collections on a one-month delay. Which is to say, the tax collections remitted to cities in July are from taxes collected in May and transferred by merchants to the state in June.)

Collections so far in the 2014 reporting period of the city's sales taxes were $23.324 million, up from collections of $22.988 million during the same period in 2013. The same seven months in 2012 saw collections of $23.372 million, while 2011 saw collections of $22.601 million. The city sales tax for fire and parks did not begin collecting revenues until 2012.

Total collections of the Fort Smith city sales taxes in 2013 was $38.938. Collections in 2012 totaled $39.21 million, just ahead of the $38.684 million collected in 2011. The 2011 collections were 3.9% above the 2010 revenues of $37.23 million.

Fort Smith's share of the countywide 1% sales tax in the June report was $1.288 million, up 0.65% from July 2013 when the city's share of the county sales tax revenues was $1.28 million. The figure was also 0.18% above revenue estimates of $1.286 million.

The countywide tax generated $15.353 million for Fort Smith during 2013, up 0.49% compared to 2012 and down 1.99% compared to budget forecasts. The countywide tax generated $15.279 million in 2012, just ahead of the $15.15 million in 2011, but lower than the peak collection of $16.61 million in 2008.

The countywide tax collection is critical because the revenue is a little more than 40% of the city’s general budget of roughly $42 million. A majority of the general fund budget supports fire, police and other critical city functions. The dip in collections compared to budget estimates has resulted in city officials seeking 4% budget cuts from all departments.

In an email to the Fort Smith Board of Directors, Finance Director Kara Bushkuhl said she believed the revenues to not be indicative of any "irregular trends." The statement is a change from last month, when the city posted 12% higher revenues than what was budgeted, the first large jump in revenues this year.

"It appears that this is some kind of adjustment but I have no information over what period it would cover or for what reason. Other cities are experiencing varied fluctuations like Fort Smith is seeing," she wrote to city directors and city administration at the time.

PREVIOUS ANNUAL COLLECTION INFO
Fort Smith 2% sales tax collection (1% for streets; 1% for water/sewer bonds)
2013: $38.937 million
2012: $39.210 million
2011: $38.683 million
2010: $37.229 million
2009: $37.554 million
2008: $41.226 million
2007: $37.858 million
2006: $36.840 million

Fort Smith portion of 1% countywide sales tax
2013: $15.353 million
2012: $15.279 million
2011: $15.15 million
2010: $14.89 million
2009: $15.04 million
2008: $16.61 million
2007: $15.15 million
2006: $14.71 million

Tyson Foods on Thursday (Aug. 28) completed the $8.5 billion acquisition of Hillshire Brands, the largest deal ever in the meat industry.

As expected, Hillshire CEO Sean Connolly will not remain with the new company but will consult during the integration process. This was one of several key management shifts announced as the two companies begin to blend their operations.

“As of today, Tyson Foods and Hillshire Brands are officially together in one great company,” Tyson Foods CEO Donnie Smith said in a statement. “Part of our strategic growth plan has been to shift toward higher-margin prepared and branded foods. This transaction gives us a portfolio of complementary, proven brands as a new springboard and accomplishes in a short time what would have taken us years to build on our own.”  

The integration of the two companies is expected to generate synergy savings of $225 million in fiscal 2015 and more than $500 million by fiscal 2017. 

Teams of people from Tyson and Hillshire have worked on integration plans since July to help make sure the combined company gets off to a good start, Tyson noted in the release. 

“During this process, I’ve had a chance get to know many people on the Hillshire Brands team and the great work they’re doing, and I’m more convinced than ever that the future of our combined companies is bright,” Smith said. “As excited as I am about our new brands, I’m equally excited about the combined talent of the two companies.” 

A new leadership team has been selected and includes a mix of existing senior leaders from Tyson Foods and Hillshire Brands.

Andy Callahan, former president of Hillshire’s retail business, will manage all retail consumer brands, including the legacy Hillshire consumer brands (such as Jimmy Dean, Ball Park, Hillshire Farm and Sara Lee), Tyson consumer brands (such as Tyson frozen, value-added poultry and Wright® Brand bacon) and Hillshire’s Gourmet Food Group.

Sally Grimes, former chief innovation officer and president of Hillshire’s Gourmet Food Group, will lead Tyson’s innovation (including research and development), sales and global brand strategy teams to support all products sold through retail channels and to maximize global growth of our consumer brands.

Donnie King, former president-Prepared Foods, Customer and Consumer Solutions for Tyson Foods, will oversee Tyson’s legacy poultry, fresh meats and non-branded prepared foods businesses as well as the combined Tyson Foods and Hillshire foodservice businesses.

Those reporting to King will include Steve Stouffer who will lead fresh meats; Noel White who will lead poultry; Wes Morris who will lead prepared foods operations; and Tom Hayes, the chief supply chain officer for Hillshire Brands, who will lead the combined Tyson and Hillshire foodservice businesses.

Those continuing to report to Donnie Smith include: 
• David Van Bebber, who leads the Tyson legal team; 
• Sara Lilygren, who leads corporate affairs; 
• Dennis Leatherby, who continues as the company’s chief financial officer; 
• Hal Carper, who heads strategy and new ventures; 
• Mike Roetzel, who oversees operations services; and 
• Russell Tooley, who heads the company’s business process and continuous improvement practice.  

Ken Kimbro, who has led Tyson Foods’ human resources functions since 2001, will transition into retirement and be replaced by Mary Oleksiuk, former chief human resources officer for Hillshire Brands.

Malik Sadiq, senior vice president-Asia Pacific, will oversee Tyson International on an interim basis. He takes the place of James Young who will be transitioning to our Cobb-Vantress breeding stock subsidiary in the coming months.

“This is an awesome team and they’re prepared to make this integration process smooth and efficient while we continue to exceed the expectations of our customers and consumers,” Smith said.

Shares of Hillshire Brands will be delisted as a result of this merger and cease trading at the close of business Aug. 28.

Shares of Tyson Foods rose 33 cents on Thursday to close at $38.04. For the past 52 weeks Tyson shares have traded between $27.33 and $44.24.

Six stakeholder groups went back-and-forth Thursday for several hours on the economic impact of the Environmental Protection Agency’s pending regulations to reduce carbon emissions from existing power plants in Arkansas.

The presentations, held at the North Little Rock headquarters of the Arkansas Department of Environmental Quality, are part of the state’s ongoing process to meet the EPA mandate in Arkansas to reduce carbon emissions by 44% – if adopted by the federal regulators on June 1, 2015.

Under President Barack Obama’s so-called Clean Power Plan, the EPA has proposed a 30% reduction in carbon dioxide emissions from existing power plants by 2030 from 2005 levels, mainly targeting the nation’s fleet of more than 600 coal-fired plants that currently supply the lion’s share of the nation’s electricity needs.

CARBON REDUCTION PROPONENTS
The first stakeholder group to make the case that the new EPA would benefit Arkansas consumers was the Arkansas Advanced Energy Foundation (AAEF), which issued a report showing that the state can achieve more than 40% of its carbon reduction target through energy efficiency measures.

Local economist James Metzger, CEO of Histecon Associates, appeared before stakeholders and presented preliminary findings from an AAEF-sponsored report that recent energy efficiency programs implemented by state utilities have resulted in more than $1.5 billion in sales activity and more than 12,500 high-paying jobs.

“We already knew that energy efficiency programs had the potential of having a positive effect on the overall economy in Arkansas,” Metzger said. “With this report, we are able to document for the first time that the potential is already being realized and even more positive impacts have taken hold in Arkansas.”

Metzger said the full report will be released next week. He said it is the first-ever attempt in Arkansas to identify and contact the hundreds of individual companies that work as energy efficiency contractors throughout the state. Based on survey data, the study estimates that 9,000 jobs and $1 billion in sales have been generated by companies doing business in the EE sector. In addition, the indirect impact of this work is another 3,500 jobs in related sectors and output of more than $550 million.

‘BAD PUBLIC POLICY’
Randy Zook, President and CEO of the Arkansas State Chamber of Commerce/Associated Industries of Arkansas, said he could think of no other public policy issue that is more critical to the economic future of Arkansas than the outcome of the EPA proposed guidelines in Arkansas.

He said the EPA’s mandate, if implemented, will drive up costs, reduce jobs and lower the standard of living for most Arkansans.

“This is, in our view, is bad public policy, driven by ideology – not science and certainly not economics,” Zook said.

To support his case, Zook introduced Dan Byers, senior director for the Washington, D.C.-based Institute for 21st Century Energy, which is housed in the U.S. Chamber of Commerce. Byers is the author of the much-referenced nationwide study that warns electric bills will skyrocket and the nation’s economy will suffer if President Obama’s Clean Power Plan is not delayed, drastically changed or halted altogether.

Byers told Arkansas regulators and the stakeholders if the current EPA guidelines are fully implemented, it would end up costing the state $5.4 billion to $7.4 billion a year to comply by 2020, the first step of the “glide path” that would gradually phase in the new rules. Those costs would rise to nearly $9 billion by 2030, Byers said, when the rules would be fully implemented.

“Huge change is coming quickly,” Byers warned.

ASKING FOR MORE TIME
Duane Highley, president and CEO of Arkansas Electric Cooperative Corp., also advocated delaying the proposed greenhouse gas rules so Arkansas regulators and stakeholders could further study “affordability, reliability and responsibility” of the new rules.

“This calls for not much of a glide path, but a crash landing,” said the AECC chief. “We don’t have much time to make some of these big changes.”

Highley also reiterated to the stakeholder panel that the White Bluff Electric Power Plant in Jefferson County and possibly the Independence (County) Electric Station could close if the proposed rules don’t allow for some flexibility in handling coal-fired power.

He said the cost alone to convert the AECC’s electric generation from coal to gas would be nearly $74 million a year by 2020 and $184 million annually by 2030. Highley closed his presentation by pointing out that the EPA has made no attempts to consult with the Federal Energy Regulatory Commission on the rule’s impact on the nation’s grid system.

“We are asking for more time,” he said.

ENVIRONMENTAL HEALTH
But Arkansas Sierra Club Director Glen Hooks told participants at Thursday’s meeting that Arkansas must avoid inaction on the EPA rules.

“We can best achieve the goals of the Clean Power Plan by transitioning away from the older, dirtier pieces of our coal-fired power fleet and ramping up our investment in clean energy and energy efficiency,” he said. “It makes a ton of economic sense as well as being better for our public and environmental health.”

In his slideshow presentation, Hooks said that Arkansas spends nearly $650 million annual to import Wyoming coal to power the 85% of state’s existing power plant fleet. He said the state could save billions by reducing its dependency on coal and adopting energy efficiency and renewable energy resources.

Other presenters at the stakeholders meeting included Todd Hillman, South Region Vice President for Midcontinent Independent System Operator (MISO), and Dr. James Phillips with the Arkansas Department of Health.

Hillman said MISO does not hold a position on the EPA’s effort to regulate greenhouse gases. However, he said the grid system operator was “uniquely positioned” to study the rule’s impact to the state’s power generation fleet and consumers in MISO’s 15-state footprint. Phillips provided the stakeholder panel with a “health impact assessment” of the EPA’s proposed guidelines, saying financial costs from “dirty air” emissions in Arkansas was nearly $450 million annually.

PUBLIC COMMENT TIMELINE
Thursday’s meeting was the second stakeholder meeting in Arkansas since the EPA announced its proposed rules in early June. The ADEQ and state Public Service Commission have been tasked by Gov. Mike Beebe to oversee the process of developing new rules to meet the EPA mandate in Arkansas.

The public comment period on the EPA docket began June 18 and must be received by federal regulators on or before Oct. 16, 2014. In Arkansas, the proposed rules, if adopted by the EPA on June 1, 2015, would cut Arkansas’ carbon emissions by 44%.

ADEQ Director Teresa Marks said the goal of the stakeholder group was not to reach a consensus, but to look practically at what would work best in Arkansas.

“This rule, we assume, is going to come out as a final (mandate), and we have parameters on what we think it is going to look like,” Marks said. “So, we need to get a jump on planning what is going to work best in Arkansas. It will have a major effect on all Arkansans.”

Arkansas’ efforts to grapple with a new EPA rule that will have a huge impact on the economy is still in the education phase and one key regulator says it’s “too early” to tell which direction the state may go in complying with the rule.

Teresa Marks, director of the Arkansas Department of Environmental Quality, appeared on this week’s edition of Talk Business & Politics, which airs Sundays at 9 a.m on KATV Channel 7.

“The scope of this plan is wide and it has some far-ranging implications,” Marks said. “What we’re looking at now is how this is going to work in Arkansas. The purpose of this group is not to decide whether or not this rule is legal or whether or not we’re going to attack the rule.”

A stakeholder group of business, regulatory and environmental interests have been meeting all summer since President Obama and the Environmental Protection Agency rolled out the so-called Clean Power Plan, a proposal to reduce carbon dioxide emissions 30% from existing power plants by the year 2030 from 2005 levels. Due to Arkansas’ energy source make-up, the EPA mandate is expected to require the state to reduce carbon dioxide emissions by 44% once implemented.

There are four “building blocks,” as Marks described them, that are the components of the rule that she said the state has flexibility with which to work.

One block requires current coal-fired electricity generation units to become more efficient. Another could push Arkansas to shift its reliance on coal-fired power to natural gas combined cycle power. Marks said this could amount to up to 70% of Arkansas’ emission reduction goals.

A third component would push the state to rely more heavily on renewable energy sources, which she said includes wind, solar, and nuclear power. The final “building block” encourages more energy conservation at the consumer level.

Marks said the state has some flexibility in deciding how those four blocks might account for Arkansas’ efforts to meet the EPA rule. Marks said she’s unsure if Arkansas will pursue a state-specific plan or join with other sister states in a regional plan to meet the Environmental Protection Agency’s order.

Marks said while constituencies differ on the positives and negatives of the regulation, there is consensus on how quickly Arkansas may have to react to implementing the final version, which is currently expected on June 1, 2015.

“One thing I think everyone across the board is concerned about is the timing of the rule,” Marks said. “We need to determine how we can react to it in order to cause the least harm to economic development and still provide the environmental benefit that we need.”

Marks said Arkansas would have until 2017 to submit a state plan to comply with the rules and would have until 2018 to submit a regional plan. She said it is “too early” to determine right now which direction Arkansas may go.

Dassault Falcon Jet broke ground on its new $60 million completion facility in Little Rock. The 250,000 square feet project will allow the Paris-based aviation firm to handle new aircraft projects and upgrade existing facilities, including the Falcon 5x and 8x models.

Construction will take place through the early part of 2016. The project will also include refurbishment of the cabinet, upholstery and headliner shops along with upgrades to older hangars. The expansion will bring the total facility footprint to 1.25 million square feet.

The announcement of the expansion was originally made in May 2013. At the time, state economic officials said Dassault could have located the facility in another part of the U.S., but they convinced the jet manufacturer to expand its existing plant.

Dassault qualified for payroll tax rebates based on current and future employment commitments and sales tax refunds on new equipment tied to the expansion. Gov. Beebe also contributed $2 million in money from his Quick Action Closing Fund to the project.

“Little Rock has been a major part of our company identity over the last 38 years and today is the company’s largest industrial facility,” said Eric Trappier, chairman & CEO of Dassault Aviation. “It has become our worldwide center of excellence for primary completion activities and pioneered the use of digital design in cabin completion. The new investment will not only increase capacity but enhance the overall quality and efficiency of the products we provide to our customers.”

“I like to say that a piece of Little Rock is always flying somewhere in the world because of the craftsmanship, ingenuity and dedication of our employees here,” said John Rosanvallon, president and CEO of Dassault Falcon Jet. “I am glad that the Dassault Aviation Board of Directors gave the green light for this major expansion and want to thank Governor Beebe, the Little Rock Airport Commission and the Arkansas Economic Development Commission for a productive exchange that ultimately led to a win-win agreement for Dassault Falcon Jet and the State of Arkansas.”

In addition to Gov. Beebe, U.S. Sen. Mark Pryor attended the groundbreaking ceremony on the grounds of the Little Rock Airport.

“Dassault Falcon Jet is a cornerstone of Arkansas’s aviation sector, and today’s significant investment will help cement that status for many years to come,” Beebe said. “This company is a big reason that aviation products are one of our top exports, and their Little Rock employees are a big reason Dassault Falcon Jet is committed to doing business in Arkansas.”

After today’s groundbreaking ceremony, several Dassault officials and city and state leaders congregated on a nearby tarmac. According to two sources, Dassault could be eyeing another expansion announcement in the near future as market conditions are improving.

Aviation and aerospace manufacturing is a huge Arkansas export product, according to the Arkansas Economic Development Commission. More than 9,000 Arkansans are employed by the industry, including nearly 1,200 at Dassault Falcon Jet in Central Arkansas.

In 2012, Dassault delivered 66 Falcon aircraft and company officials said they expect that number to increase in the coming years.

Building permits in Fort Smith, Greenwood and Van Buren were a combined $18.149 million in August, up 2.71% from August 2013's total of $17.7 million.

Even though combined values are up over the same month last year, from July to August of this year, permits fell 13.47% from $20.975 million last month.

For the first eight months of the year, combined permits are at $136.108 million, an increase of 9.77% over the same period in 2013 when only $123.994 million in permits were issued across the three cities.

FORT SMITH
The city of Fort Smith had a total of 210 permits issued with a value of $17.701 million.

Of the permits issued, $11.333 million were commercial permits, including a $4.7 million addition to Morrison Elementary at 3415 Newlon Road. The addition to Morrison accounted for 26.55% of all building permits issued in the city last month.

In residential construction, 123 permits were issued at a total of $4.267 million.

Of the residential permits issued, 12 permits with a combined total of $3.313 million were issued for new construction. The new construction permits accounted for 77.66% of all residential construction permits issued during the month of August.

Comparing August 2014 to the same period last year, permits are up in the city are up 5.66% from $16.754 million in August 2013 to this year's $17.701 million total.

GREENWOOD
The city of Greenwood issued one building permit last month for a total of $123,080 for a new home.

The total is a 24.32% drop from August 2013, when three permits totaling $162,631 were issued in Sebastian County's second largest city.

VAN BUREN
Van Buren saw a total 38 permits with a combined value of $324,000 issued last month.

The total is a 57% drop from $753,500 in permits issued during the same month last year.

Compared to July, the city also saw a drop of 42.05% from $559,100 to this month's total of $324,000.

2013 RECAP
Combined values in the three cities during 2013 were $203.037 million, compared to $157.32 million during 2012. The 2013 value is above the $201.079 million in 2011.

Fort Smith closed 2013 with the largest share of valuations, logging $177.687 million (a one-year increase of about 30.24% from $136.428 million in 2012), while Van Buren was the next largest with $17.067 million (a one-year increase of 38.96% from $12.282 million in 2012). Greenwood posted an additional $8.283 million, the only city to show a decrease from the previous year's total of $8.609 million (a decrease of 3.79%).

The gains in the Fort Smith market were largely from industrial construction projects at Chaffee Crossing, the construction of Mercy's new orthopedic hospital along Phoenix Avenue and various municipal construction projects across the city.

The Fort Smith Central Improvement District approved a variance at a special meeting Tuesday (Sept. 2) that would allow a new Jimmy John's sandwich shop under construction at 822 Garrison Avenue to incorporate construction elements that differ from downtown guidelines.

At issue for the CBID were plans to use tinted windows on the structure even though downtown guidelines state that tinted windows are not allowed.

Original plans for 822 Garrison called for tinted windows on the ground floor occupied by Jimmy John's, as well as tinted windows for loft apartments above the gourmet sandwich shop.

Deputy City Administrator Jeff Dingman, the city's liaison to the CBID, explained the purpose of the window ordinance to the commissioners.

"Really, where the guidelines get into tinting windows is in the storefronts. That's where it mostly addresses the tinting of windows because in the old day, the display windows were not tinted so you could see in and see the goods from outside," he explained.

CBID Chairman Richard Griffin, who has his own mixed use development under construction in the 400 block of Garrison Avenue, voiced opposition to the tinted windows proposed for 822 Garrison.

"Just to remind you of what our challenges are — we have a variance process and it seems to work and buildings end up looking pretty darn good," he said.

The CBID eventually voted to allow the variance for upper floors of the building to use a "moderately" tinted window while specifically prohibiting the use of tinted windows on the ground floor.

The commission also voted to deny a variance that would have allowed the sandwich chain to have a distinctive red strip running along the top of its sandwich shop, in an area between an apartment on the second floor and the restaurant on the first floor. A motion passed by the commission said the strip must be black in color.

Ghan said he would take the design to his clients and could bring back additional variance requests at the commission's next regular meeting on Sept. 16, though he said it would not slow construction.

He added that the restaurant could be open for business in about three months barring any delays. Ghan said total costs for the renovation of 822 Garrison were not yet known as unexpected expenses have occurred in the structure likely constructed between 1910 and 1915. Considering the overruns, he expects the total cost for the project could run $600,000 or more.

Included in the project is office space, as well was two loft apartments. Ghan said Jimmy John's has signed a lease on the office and one of the loft apartments. The 1,400 square foot apartment rents for $975 per month, leaving an additional 1,275 square foot apartment available for lease at $950 per month.

In other business, Dingman informed the CBID that a contract had still not been signed for the splash pad at Compass Park on the went end of downtown.

The project is more than $12,000 over budget, Dingman said, a bit lower than the $50,000 over budget it had been earlier this year. The park's original construction budget was $300,000.

It is possible that a masonry bench could be removed from the design of the park in order to meeting budget estimates, Dingman told the commission.

"But the recommendation from this group was to try to keep all this stuff," he added.

Griffin suggested that the commission could try to use money originally intended for railroad relocation to cover the overrun since the city and Union Pacific were unable to come to terms for relocation of a rail maintenance yard located behind Miss Laura's Visitors Center.

Asked when Compass Park could open, assuming money is found or cuts are made to the design, Dingman said there was no timetable.

It was also noted that no applications had been received for a vacant commission position vacated by the resignation of former CBID Commission Bennie Westphal.

"I'm speaking of tradition, but normally this group will make a recommendation and that hasn't been done yet. It's not a completed process," Griffin said.

Dingman said public notice had been made regarding the vacancy and the city board of directors and the CBID had been made aware of the vacancy should either group have recommendations on a possible replacement for Westphal.

The Fort Smith Board of Directors voted Tuesday (Sept. 2) to close a portion of Veterans Avenue in Chaffee Crossing to make way for possible future expansion plans for the Arkansas College of Osteopathic Medicine.

According to Fort Smith Director of Development Services Wally Bailey, "the closure is requested because the portion of right-of-way proposed for abandonment bisects the medical school site and is of no value to the school's overall master plan.”

The closure of Veterans Avenue would allow the medical school to grow to the northwest at a future time, as needed, according to Larry Hall of Risley-Associates, a Fort Smith-based architecture firm working with the school on its master plan.

In order to accommodate the road closure, trucks that use the route along Veterans Avenue will have to re-route along Frontier Boulevard to Taylor Avenue, then to Fort Chaffee Road and then back to Roberts Boulevard, according to Bailey. The change in routes is expected to add four to five miles for trucks servicing industrial clients in Chaffee Crossing area, he added.

No opposition was present at Tuesday's regular board meeting, though Graphic Packaging had expressed concerns about the re-routing of trucks through the area. Bailey said the concerns were addressed Tuesday in an email reply to the company and the company said it was not expressing a challenge to the plans. The plan to close the section of Veterans Avenue through the medical school site was approved by a vote of 7-0, with Bailey noting that no emergency clause was requested to make the closure immediate.

The reason, he said, was to allow the city to work with industrial companies to re-route trucks servicing Chaffee Crossing facilities during the next 90 days.

First drawings of floor plans and possible buildings at the site were unveiled Aug. 21, with a planned $60 million, three-story building to be built starting in January 2015. Completion of the first building is expected in July 2016, with a possible first class of osteopathic students scheduled to begin classes at the site in August 2016.

The Board also approved a set of resolutions dealing with Whirlpool and the road widening project at Jenny Lind Road and Ingersoll Avenue, where potentially cancer-causing trichloroethylene has caused property values to drop in the area. The situation has resulted in lawsuits for property damages while Whirlpool works with the Arkansas Department of Environmental Quality to clean up the pollution caused by the use of a degreasing agent containing TCE at its now-closed factory.

City Administrator Ray Gosack said a resolution adopted by the Board would further the city's efforts to protect construction workers at the site from possible exposure to TCE contamination, which has been discovered at 15 feet below the surface in water, though no TCE contamination has yet been found in soil samples taken at the construction site.

"So we've drafted an agreement with Whirlpool that would give them access to the construction site if they need it. It would also require that if the city has to take extraordinary measures during the construction because of the TCE contamination, that Whirlpool would reimburse the city for the cost of implementing those measures to deal with the TCE contamination," Gosack told the Board.

The second resolution accepted a donation of land from Whirlpool valued at $53,900 that will be used in the road widening project.

In other business, the Board approved a resolution that sets fourth a suggested best practice guide for the Board of Directors. Gosack noted that it was not an ordinance and therefore not rule of law. Past inceptions of the guide, previously known as a "Board Governance" policy guide, included rules for censuring Board members but were eventually taken out as concerns were raised.

City Director Pam Weber, who initially proposed a packet for new Board members, joined City Directors George Catsavis and Philip Merry in voting against the resolution because she said the proposal went too far.

"I'm concerned about this and I was the one who broached the subject at (the Board of Directors) retreat, but I'm concerned about this because what we asked for and what we got are totally different. I think we asked for a document that said these are your responsibilities, these are the things that you do, a broad-ranging document," she said. "To me, this is very specific and I don't want something that in five years or more, a Board member's going to feel handcuffed by or that they can't do something that's in the best interest of their constituents. So I have great concerns with it. I think we went a little too far in this."

Overall Arkansas tax collections for the first two months of the fiscal year are on a positive track, with the topline up 1.9% compared to the same period in 2013.

Year-to-date gross revenue (July 2014-August 2014) totaled $927.8 million, up 1.9% above the same period last year and above forecast by 0.4%, according to the report issued Wednesday (Sept. 3) by the Arkansas Department of Finance and Administration.

Individual income tax collections for the fiscal year totaled $422.4 million, up 6.7% from last year and just 2.2% above the budget forecast. Year-to-date sales and use tax collections were $373.7 million, down 1.8% compared to last year and 1.4% below the budget forecast. Income taxes and the sales and use tax collections are the two primary sources of state revenue.

John Shelnutt, head of the Department of Finance and Administration’s Economic (DFA) Analysis & Tax Research division, said the decline in sales tax collections is connected to an August audit.

“August results were ahead of forecast in all major categories of collections. A decline in sales tax collections compared to last year was anticipated, to adjust for one-time audit receipts in August 2014. Sales tax growth adjusted for this event was 3.9 percent year over year. Individual Income tax collections were up 10.2 percent, aided by payroll timing effects in the Withholding category,” Shelnutt wrote in the report.

Corporate income tax collections for the first two reporting months of the fiscal year totaled $26.2 million, down 20.2% compared to last year and 24.1% below forecast.

AUGUST NUMBERS
August gross revenue was $457 million, up 3.2% from last year and 2.9% above forecast.

Individual income tax collections during August totaled $209.1 million, up 10.2% compared to August 2013 and above forecast by 4.4%.

Sales and use tax collections during the month totaled $188.2 million, down 3.3% from last year and 1.3% above the forecast.

Corporate income tax collections in August totaled $7.8 million, up $1.9 million compared to August 2013 and 22.2% above forecast.

OTHER TAX COLLECTIONS
Alcoholic beverage
July 2014 - August 2014: $10 million
July 2013 - August 2013: $9.4 million

Games of skill
July 2014 - August 2014: $6.8 million
July 2013 - August 2013: $6.3 million

Tobacco
July 2014 - August 2014: $38.5 million
July 2013 - August 2013: $38.4 million

Insurance
July 2014 - August 2014: $20.7 million
July 2013 - August 2013: $20.7 million

COLLECTIONS HISTORY
Tax collections during fiscal year 2014 (July 2013-June 2014) totaled $6.242 billion, up 0.5% above the previous fiscal year and up just 0.2% compared to budget estimates. The year marked the fourth consecutive year of revenue increases. The fiscal year ended with a budget surplus of $78.7 million.

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

Arkansas tax collections reversed a negative two-year slide in the 2011 fiscal year, with collections up 4.5% in the August 2010-August 2011 period. State tax collections for fiscal year 2011 totaled $5.673 billion, up 4.5% above the $5.43 billion in the 2010 period.

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

A statewide survey conducted last week found that a strong majority of Arkansans are persuaded by a variety of arguments to increase broadband access to K-12 schools and students.

The poll of 600 registered voters was conducted Aug. 25-27 by Washington, D.C.-based Winston Group on behalf of FASTER Arkansas, a working group formed by Gov. Mike Beebe after education policymakers determined that most Arkansas schools did not have adequate broadband capabilities to participate in online Common Core testing or to take advantage of the internet for instructional purposes.

FASTER Arkansas is comprised of business leaders calling for the state’s public schools to connect to a university-based high-speed network called ARE-ON, a high-speed fiber optics network connecting Arkansas public colleges and universities, health care providers and others. Public schools are not allowed to connect to ARE-ON under Act 1050 of 2011, which was passed with support by the state’s telecommunications industry.

Several key poll results from the FASTER survey included:
• 69% support a proposal to amend state law to allow K-12 educational institutions to connect to “an existing high speed Internet network” through a public-private partnership. Just 19% opposed and 12% were undecided.

• 71% believe that allowing the ARE-ON expansion would level the playing field by reducing the cost of high speed Internet for school districts statewide, including rural and low income areas.

• 81% said it would increase students’ access to the Internet and would create a better educated workforce and provide more jobs.

• 61% support holding a special session to change the state law to allow the ARE-ON expansion. Roughly 34% oppose a special session and just 5% are undecided.

Last month, Gov. Mike Beebe said that the state’s public schools could tap $15 million it already spends annually on outdated copper networks along with federal funds to connect schools to a high-speed fiber optic broadband network. The existing revenue stream could generate approximately $45 million over the next three years for the broadband extension.

EducationSuperHighway, a national nonprofit that works to expand internet access in schools, has been partnering with the state Department of Education to study the issue and is working with Arkansas to expand access as part of a pilot project that also includes Virginia.

EducationSuperHighway CEO Evan Marwell said last month that Arkansas can become the first state to meet the national ConnectED goal, announced by President Obama last summer, of connecting 99% of American students to at least 100 megabits per second with a target of one gigabit per second within five years.

Leaders with Wal-Mart’s Mexican and Central American business unit have announced a three-prong plan to grow sales over the next year on the heels of solid second quarter results across Latin America.

Scot Rank, CEO of Walmex, spoke at the Goldman Sachs Global Retail conference on Wednesday (Aug. 3) with an upbeat tone about the improving business climate in Mexico. The business unit is an important piece of Walmart International with $103.3 million in sales in the recent quarter, a gain of 5.6% from the prior-year period, despite the ongoing efforts to turn around the Sam’s Club business in Mexico.

“We plan to grow sales in three ways: Focusing equally on same-store sales gains, adding square footage and more e-commerce transactions,” Rank said during his prepared remarks.

Walmex anticipates sales growth of 4.1% in Mexico, and 7.6% growth at its stores in Central America this year.

COMP SALES, CHALLENGES
He explained that the retailer’s self-serve formats and Express models are performing well with traffic growth of 2.3% in Mexico and 3.2% in Central America in August on top of robust gains in the second quarter. Overall, the retailer said same-store sales rose 3.5% in August from a year earlier, the best reading year-to-date

Walmart operates 878 Express formats in Mexico averaging 12% comp sales growth this year. Rank said 52% of retail in Mexico overall is small format. He said margin performance has been stable even as the retailer has reduced prices through rollbacks  and other promotions. 

“Our expenses are 13% of sales, that compares to 27% of sales for most of our competitors. Our average ticket sale is also up 2%,” Rank said.

The retailer is improving its modular planning, retraining merchants and expanding its banking efforts with Banco Walmart, according to Rank.

“Banco Walmart is important to us. We are looking to accelerate growth as demand increases. Sales are up 50% this year and we have 635,000 credit card holders,” he said.

He said Sam’s Club and the turnaround efforts have been the division’s biggest challenge over the past year and half. New management was put into place in April and Rank said the efforts involve cleaning up inventories and increasing more imports from Sam’s Club U.S. Walmex said the most challenging category in general merchandise is apparel as more global retailers are entering this market.

“We expect gradual improvement in sales through the end of the year,” Rank said. 

NEW STORES
Walmex has scaled back the number of stores it’s opening by 15 this year, pushing those formerly slated for late December into 2015. This is a $1.02 billion reduction in the retailer’s 2014 investment plan.

Rank said the decision to move the 15 stores openings to January 2015 is related to timing and delays in getting permits.

“We opted to focus on our customers needs between December 15 and January 1 and not be distracted by new store openings during that two-week timeframe,” he said.

In 2014, the retailer will open 149 stores in Mexico and Central America. He said that’s a 4% square footage gain in these markets from last year.

“Central America has a robust real estate pipeline and less e-commerce sales, but as we complete our system integration of this market, we expect lower expenses in the next couple of years and opportunities to grow gross margin,” Rank said.

E-COMMERCE PLANS
Walmex launched its general merchandise website one year ago and is seeing moderate growth in Mexico. Rank said the plan to grow e-commerce sales is ambitious, but includes a strategy to integrate the retailer’s network of stores and distribution centers in an omni-channel system.

He said the company is training 200 e-commerce employees to work the regional market and work with Wal-Mart’s main e-commerce team in San Bruno, Calif.
 

He said grocery deliver and online ordering of general merchandise are the two types of e-commerce operations that hold opportunity. Grocery home delivery is nothing new for Walmex. It’s a service that’s been around for decades, according to Rank.

He said it started with consumers phoning in orders, then faxing and emailing and now shopping directly online. Those orders are picked from warehouses and some 80% are picked from Superama sales floors. Rank said this business continues to grow with services being rolled out in Monte Rey and Mexico City this month.

“Though many say grocery delivery isn’t profitable, it is for us and we see lots of opportunity,” Rank said.

Since launching the general merchandise site last year, Rank said use has exceeded the retailer’s expectations. 

“We also operate 150 kiosks in stores teaching customers how to use the site and offering the opportunity to pay in-store and have the product delivered, as opposed to giving out their credit card numbers online. This has proven popular in light of the data breaches reported by other retailers,” Rank said.

Mike Callan’s office at Arkansas Oklahoma Gas Corp. was almost empty the Thursday before the Labor Day weekend. There were hooks on the walls where pictures once hung. On his desk was a box of shotgun shells and Rice Krispie treats in a Ziploc bag.

It was his last day as an AOG employee.

“I hope not,” Callan replied, laughing in acknowledgment of the odd pairing on his desk when asked if the items are part of his severance package.

The departure of Callan, 56, from the top post at the Fort Smith-based regional natural gas utility providing service to almost 60,000 customers may have been a surprise to those outside the company. But for a highly regulated company forced to predict and balance a myriad of factors – weather, customer usage, market price shifts, etc. – that often defy balance and prediction, internal surprises are few and far between.

It has been known for several months within AOG’s 210 employees that Callan would depart and Kim Linam would become the next president. Linam, a certified public accountant and a 10-year veteran with the company, will be the first female to lead the organization and the first non-attorney at the top post since 1978. She will also be the sixth president to lead the company in this corporate structure.

“Kim is going to be a natural fit for this. … She has a tremendous grasp of the industry,” Callan said.

Later in the interview, Callan dismissed the issue of gender.

“People don’t get hired or promoted around here because they are male or female.  They get that based on whether they can do the job. … She can do the job,” Callan said.

MORE THAN A STEPPING STONE
In the mid-1980s, Callan wasn’t sure AOG was the job for him. He was hired as an intern while attending law school, and in September 1985 joined the AOG staff as a landman.

“I thought this would just be a good career stepping stone,” Callan said.

It wasn’t. It was a career. He credits that to Emon Mahony Jr., the president of AOG from 1978 to 1998.

“Emon was the single biggest influence on my professional career. … I’ve been here just short of 30 years, and that would not have happened without that (mentoring and support from Mahony),” Callan said.

Callan would become general counsel for the company in the early 1990s, and then succeed Mike Carter as company president in March 2008. Callan’s rise through the leadership ranks at AOG would correspond with a significant industry shift that would see AOG be forced to depend less on natural gas from the surrounding Arkoma Basin and more on natural gas purchased from the broader commodity market. That gas was much more expensive, and the supply was not as certain. It was a troubling recipe that could have resulted in higher prices for customers in the Fort Smith area and the possibility of outages.

But fracking and other technology generated a boom in the domestic natural gas industry that would result in the Fayetteville Shale Play, a reduction in natural gas prices and proven natural gas reserves that some estimates say could provide at least 100 years of the clean-burning fossil fuel for the U.S. market.

THE CNGVEHICLE PUSH
The abundance of natural gas resolved a supply and price problem for AOG, and gave Callan the platform to push for what would become a growing effort in Arkansas and nationwide to convert vehicles to use compressed natural gas (CNG) for fuel. AOG would open Arkansas’ first public CNG fuel station in early 2011. By the end of 2011, the company sold around 3,000 gasoline-gallon equivalents (GGE) of CNG. That would grow to more than 10,000 GGE by the end of July 2014. AOG would open its second public CNG station in August 2014, and Arkansas is likely to have at least 11 public CNG stations by the end of the year.

AOG also expanded its fleet usage of CNG during Callan’s tenure as president.

“We really picked it up in recent years and made it a mainstay in our operation,” Callan said of the use and promotion of CNG.

In an Aug. 7 interview, Callan said moving to more CNG vehicles was an easy decision from a budget standpoint.

“Most of our vehicles, we're looking at at an amortization of less than three years. We're able to pay for the conversion and then everything after that is pure operations cost savings," he said.

TECHNOLOGY
Another aspect of Callan’s tenure is the continued effort to incorporate technology into the system. Technology improvements are ongoing, but AOG has the ability to see most of the system in “real time” and is able to read in “real time” about 10,000 home and business meters among the company’s 58,000 customers. Eventually, all meters will be monitored in real time.

The company is also able to track work trucks, which allows for efficient response to planned and unplanned maintenance issues and other field work needs.

“It gives you much better control of the system and allows you to operate a much safer system,” Callan said of technology upgrades. “And you’re not sending a truck all the way across town when you have a crew just across the street.”

Callan and Linam credited AOG employees and the University of Arkansas at Fort Smith for helping the company adapt to technology ahead of larger utility companies with more resources. AOG has a program that pays full or partial tuition to employees pursuing higher education.

“We’ve gotten a lot of talent out of UAFS,” Callan said, adding that a more educated employee “is also a benefit for our customers because they are better able to serve the customer.”

Linam said the “aggressive” use of technology began when Mahony sought ways to “improve internal controls.”

“As a small utility, I would say we are ahead (of other utilities) with technology. ... You can do that when you have talented people who know the right thing to do to best utilize the system within the resources we have,” Linam explained.

The technology feeds Linam’s number-crunching background. It’s one of several reasons she was promoted, Callan said.

“I’m a data geek. We can put our hands on so much data that we didn’t have just five years ago,” Linam said.

The small size of the company may have helped it move quickly with technology.

“We don’t spend a lot of time flailing around in paperwork or with a bureaucracy. ... If we’ve got an issue in the morning, we will often have you an answer by the end of the day,” Callan said.

LINAM’S LEADERSHIP
Linam professes to be a “behind the scenes person,” with the public and AOG customers and employees seeing only an “easy transition” of leadership and “natural progression” of service. But in adjusting herself higher in the chair and folding her arms against her body, she noted: “I’m not a shrinking flower. I will stand up for what I think is right for AOG and our customers.”

She follows presidents who were active at state and local levels. Mahony was chairman of the Fort Smith Chamber of Commerce and as head of a city task force was, arguably, the single biggest force behind the expansion of Lake Fort Smith.

The lake expansion, completed in late 2006, increased water storage from about 8.4 billion gallons to almost 28 billion gallons. It is estimated to provide water for the entire Fort Smith region beyond 2060.

Callan has served as board chairman for the Fort Smith chamber and the Arkansas State Chamber of Commerce. He’s also been recognized as a leader in pushing private and public expansion of CNG use.

Linam wants AOG to continue to be a “champion” in the CNG push, and lobby at the state and local levels for job creation policies.

“Economic development is always important to AOG,” Linam said.

Her top priority, she said, is to monitor and grow the company’s “progressive path.”

“I’m just fortunate to be able to build upon the foundation that is already here,” Linam said.

Every job has its frustrations. Callan said his top frustration will also be one Linam will face – especially with increased government involvement in the energy sector.

“I think that (top frustration) has been over the years a lack of understanding of the business among the regulators. That’s not just Arkansas, but you see it across the country. ... Regulation is not the problem. It’s not being regulated that is frustrating, it’s that lack of understanding among those doing it (regulating),” Callan said.

Arkansas may have just had its coldest July on record, according to an Aug. 12 report from NOAA's National Climatic Data Center, but it does not mean the state is suffering agriculturally.

According to Jay Carter, chief executive officer of Farmer's Co-op in Northwest Arkansas and the Fort Smith region, crops have done well with the unseasonably cooler and wetter summer.

"Actually, from a row crop standpoint — wheat, beans and corn — we've had a great wheat harvest and they just started harvesting corn in Texas and maybe up here this week. The initial indications are for a very good corn crop. Beans won't harvest until the first of the year, but right now they look terrific. So from row crops, it's been a good year."

With crops fairing so well due to the temporary change in weather patterns — Arkansas typically averages a hot and dry July versus the cool and wet that has been the norm this year — prices should be good for consumers since the supply is so strong.

"If you look at prices from here to two years ago, we're at about half (of where we had been). So obviously from a consumer standpoint, that's positive. Not the best for the grain guys, but from a consumer standpoint we've seen some softening," Carter said.

With the transition to fall and winter, he said the biggest concern for the bean crops being prepared for harvest early next year is the possibly of a colder and wetter winter than average. The Farmer's Almanac has listed Arkansas in the "brisk and wet" category in its 2015 edition.

"Freezing and ice would be the big thing," Carter explained. "I think the big thing would be just destroying the plants, getting ice on them and laying the plants down. Generally, we have mild falls and winters. It could have a detrimental effect on the beans. But we'll hope for the best."

And with corn and wheat looking strong, he said it is hard to complain.

"Two out of three … we're sitting good."

Carter said while there is a lot of talk about large commercial farm operations and how the weather impacts those operations, he said the weather has also had an impact on the everyday gardner. He said even with a delay to the start of the typical spring growing season, home gardeners have done well.

"This year, from a garden standpoint, we were 30 days late due to a cool spring. We saw it in our business," he said, adding that despite the late start to planting season many people stuck with the staples of home gardens.

"As far as what people planted and didn't plant, there was not much of a shift. We probably saw more tomatoes due to the cooler and wetter summer than we normally see," Carter explained. "But there wasn't much anticipation. Even though it was later, I don't know that we'd necessarily see a shift in what the backyard gardeners were going to plant. Everyone has their favorites."

As for getting ready for the fall and winter, Carter said now is the time to prepare plants that thrive in cold environments for planting during this first week of September.

But he said plants that either do not harvest until late in the year or are still producing due to the cooler and wetter weather, like tomatoes, could experience a quick death if home gardeners are not careful and observant of changes in the weather.

"The first frost is (typically) not until mid-November, but we anticipate we may get an early frost this year. I don't want to discourage folks, but they may need to cover them a little sooner."

Carter said the home gardener does not only have food-producing plants to consider for the fall and winter, but he said flowers could receive some focus, as well. He specifically pointed to bulbs as flowers that can be planted during the winter for a spring bloom.

Other cool-weather growers include potatoes, and some types of onions and cabbages, he said.

The only real downside to any of the unseasonable weather, Carter said, is once winter sets in and much of the area's fresh food begins having to be shipped in from other regions such as California, consumers could see a winter to spring price hike.

"Farmer's markets have been great and a lot of produce is sold and the majority are local growers. But once that season is done, we're more dependent on other parts of the country and obviously, dry and hot out west will affect prices as we go into the fall and winter months. The good news is it has been a good summer for us."

A recent study released by the website Nerd Wallet lists Fort Smith as one of the cities in America "that are borrowing the least smart," but according to a Walton College of Business expert, the study may not mean doom and gloom for the Fort Smith area economy.

The study, which ranked the 10 areas that are "borrowing smart" as well as the 10 that are not, analyzed borrowing in comparison to income.

"We divided each metro area’s average amount of consumer debt into its median household income to get a better sense of the places that are carrying truly heavy loads. A high ratio of average debt to median household income indicates danger on the horizon," Nerd Wallet analyst Lindsay Konsko wrote.

The website made clear that the percentages created were not to be understood as the area's debt-to-income ratio. It also made clear that debt levels included credit cards, auto loans and personal loans, but not mortgages.

The study showed that Fort Smith ranked as seventh worst in American metro areas not borrowing smart, with the debt as a percentage of household income at an average of 72.9%, the second highest in the nation trailing Monroe, La., at 73.3%.

HOUSING COST FACTOR
Kathy Deck, director of the Center for Business & Economic Research at the Walton College of Business at the University of Arkansas in Fayetteville, said the study does not mean the local economy will suffer due to the higher levels of debt to household budget.

"The first thing, and they say this explicitly, is it excludes mortgage debt. It may also exclude student loan debt," she said. "When you think of the overall debt load, it might not be surprising in a place like Fort smith with relatively low incomes that folks also have relatively low mortgage debt because houses are affordable."

Deck said with low mortgage debt, it was reasonable to assume that some households could afford to take on higher levels of other debts.

"So the distribution to more household consumer debt is not necessarily surprising in an affordable housing market like Fort Smith," she added.

She said other comparable communities on the list of "least smart" borrowers included southern cities with low cost of living such as Monroe, La., Jackson, Miss., and Waco, Texas.

"If you look at a lot of the other communities, and I don't know what their housing prices are off the top of my head, but you imagine it would be comparable."

MORTGAGE DEBT COMPARISON
And while Nerd Wallet has ranked Fort Smith as among the regions with the "least smart" borrowing practices, total household debt outside of mortgage debt is not that different from cities ranked as some of the smartest in terms of borrowing.

The average debt of the 10 cities making up the smartest borrowing cities is $25,480 while the average for the 10 metros who were not the smartest about their borrowing was $26,520. The difference amounts to only $1,040. In Fort Smith, the figure is even lower with average consumer debt of only $26,296.

The figure ranks nearly even in terms of overall debt with the San Francisco metro, with its average consumer debt of $25,828 in spite of being ranked the third smartest about its borrowing. The big difference initially appears to be household incomes (San Francisco's average household income is $74,922 versus Fort Smith's $36,061).

But Deck said if mortgages were factored in, Fort Smith could be ranked closer to many of the cities labeled as the smartest borrowers.

"The others with the low (overall) debt are in the (most expensive) housing markets in the country. All of those have relatively high housing costs," she explained.

So even though the ranking may on its surface look rough for Fort Smith, she said overall it would not hurt job growth and consumer spending in the Fort Smith region.

"In a typical household, you have the budget to service that debt and this doesn't mean it is necessarily detrimental to the economy."

Deck added that used wisely, debt in and of itself is not a bad thing and actually helps to grow the economy versus shrinking it.

"When you look at the overall economy and retail sales across the board, there are only two ways to increase consumer spending — more income or more borrowing," she said, adding that as the economy has improved, credit has loosened to allow more consumer spending.

"It may seem perverse, but when credit conditions loosen like this, it is indicative of an improving economy. And when people spend more, employment goes up. And when employment goes up, it's good for the economy."

No one told Keith Scheffler that moving his plastics manufacturing business from Asia to Lowell, Ark., would be easy, even if Wal-Mart Stores is the company’s largest customer.

Scheffler, owner and CEO of Creative Things, said onshoring the business has been a five-year process and he’s still trying to figure it all out with the help of lead lender Signature Bank and a state and local economic officials.

“Five years ago Gov. (Mike) Beebe gave me a direct challenge. He said, ‘It’s great that you are doing so well with your foreign operation, but what are you doing to help Arkansas and your local communities?’ It was a wake-up call to me,” Scheffler said.

Creative Things was already selling plastic products – dog toys, cell phone cases, etc. – to Wal-Mart as an importer when the retailer announced its 10-year, $250 billion additional product commitment for items made in the U.S., which helped to accelerate Scheffler’s timeline to get the business moved.

“We picked up our operation in Asia and moved it here, all but two lines, one of which will be moved over in the next few weeks. There were several challenges in getting the local site up and running smoothly with orders also increasing,” Scheffler said.

Creative Things has been able to create 64 jobs since last fall and plans to add 40 more  within the next six months to the operation now based in Lowell. The average wage is $15 per hour and finding the skilled labor has been a tedious process.

“We must have sorted through 300 to 500 applicants before we got to the 64. We are pulling folks in with no manufacturing experience in some cases and training them. But getting the right team in place is critical,” he said. “We feel so strongly about the shortage in skilled manufacturing labor we are working with area schools and the state to get more training programs in place.”

The plant is now running at about 70% capacity and more equipment is needed for the pending expansion.

FUNDING PUZZLE
Grant Tennille, executive director of the Arkansas Development Commission, said the work to help fund the company’s move also has been a challenge.

“Piecing together the funding has taken some creative effort. It’s been challenging at times because Keith’s operation was viewed as a startup, despite his track record,” Tennille said.

Tennille said the state extended Creative Things a $280,000 grant for the first jobs it created. That was to be part of a $784,000 commitment to help gear up manufacturing jobs.

With funds running short in the Governor’s Quick Action Closing fund and the steep costs related to equipment needs for automation, Tennille said it’s taken the help of some local banks to extend operating capital toward this project.

He explained that the nature of this business, high front-end startup costs to make products for one customer in a short time window entailed risks that fell outside the return on investment capital requirements by the state. That said, the state has worked with a lending group who can syndicate loans for reduced risks and still get Creative Things the funding it needs for expansion, Tennille said. The state is then able to guarantee a portion of the loan.

Scheffler said he had no track record of manufacturing in the U.S., despite the fact he owned two plants in Asia. That lack of local financial history is like someone with a zero credit score trying to get a loan. He said Signature Bank has been a huge part of his ability to proceed with the planned expansion. 

Gary Head, president of Signature Bank, also spoke highly of Scheffler. 

“As a twice-wounded soldier, he exemplifies the word ‘bravery’ and we at Signature Bank know what it’s like to be a startup and face challenges. We believe in Keith’s ability to expand and grow this business and we feel good about the fact that his largest customer, Wal-Mart, can pay their bills on time,” Head said.

He said the bank is just doing its job in helping Creative Things expand and create jobs.

“That’s the very thing a community bank should do,” Head said.

THE “WHY” OF IT
Scheffler told The City Wire there were plenty of reasons as to how he moved the operation, but none of them are as significant as why he did it.

“We wanted to bring solid jobs and ongoing personal involvement into our community,” he explained. 

He said there is real opportunity for growth, not only in his own business but also in the ancillary supplier relationships he has been to cultivate in recent months.

“We work with Alpha Packaging down in Greenwood (Sebastian County) for all of our printing and packaging needs. They work with me on a ‘just in time’ basis. We also have worked with a local temp agency and of course Signature Bank,” Scheffler said.

He said managing the supply chain of his products sold to Wal-Mart has become much easier since he onshored the operation. He’s saving between 10% and 12% on items by not having to ship from Asia.

“I have erased the uncertainty related to customs and potential dock worker strikes that can hold up shipments, that already takes a minimum of 120 days to import. This shortened time window is huge in seasonal and trendy products that I can now turn out as needed and just in time. This also gives me much better inventory controls,” Scheffler said.

Jeff Amerine says there is no cure for serial entrepreneurs whether they are age 17 or 37 or 97. Even if launching a startup venture and seeing it through two years or more is likely to age the founders in dog years, he said during his emcee duties at the Northwest ARK Challenge Demo Day held Thursday (Sept. 4).

Amerine, director of technology ventures at the University of Arkansas, said the idea of building and sustaining a knowledge-based economy is the core mission of the ARK Challenge partnership. The Challenge was launched in 2012 through a deal with Winrock International, UA and NorthWest Arkansas Community College with funding from state and federal agencies. The 2014 program is state funded and active in Northwest Arkansas with a brand new cohort added in Central Arkansas.

Five entrepreneurial teams, each with local ties, could barely contain their excitement as they took the stage for 10 minutes to pitch their ventures to a room full of investors, mentors and other entrepreneurial junkies, including Rick Webb, senior vice president of global business processes at Wal-Mart Stores. The event was held at Crystal Bridges Museum of American Art in Bentonville.

Webb, a self-proclaimed geek and a mentor in the ARK Challenge for all three years, said he identified with the teams and their longing to find solutions to big problems using technology and processes.

Amerine said this year’s competition — a 2.0 version and new iteration of the past two years — was tweaked to try and bring more mature ventures along faster to fully scalable levels.

Five teams were chosen out of 70 ventures from around the world seeking entry into the 12-week startup bootcamp. Each team gave up a 6% stake in their business for $50,000 in seed money and unlimited mentorship and counseling over the 12-week period. The Demo Day was moved to the middle of 12 weeks to give each team more time to make connections and secure funding that can ensure a viable future.

“This is just the beginning of a process that takes the entire community’s support to keep this fire burning,” Amerine said. “It’s not possible without our angel investors and our mentor base.”

Amerine said all of the teams in the 2.0 cohort have the opportunity to be “positive disruptors” in their space bringing solutions to real world problems.

Edward Haddock, senior area manager of the U.S. Small Business Administration, said he was pleased to see teams in this cohort focused on helping small businesses solve real problems.

THE TEAMS
• HIPAA RISK MANAGEMENT
Anne Drachenberg, co-founder of HIPAA Risk Management, said her team has had their company up and running for several months, and they assumed they would need to travel to Silicon Valley or elsewhere for funding and mentorship.

“We have been to Seattle and San Francisco for funding, but neither of those markets offered anything like the ARK Challenge with the cohesive mentorship program 24/7 over a 12-week period. It’s been amazing to have this opportunity in our own backyard. We have made valuable connections through mentor introductions to people that would never return our call otherwise. I can’t say enough about the benefits we have received in just five weeks,” Drachenberg said.

The HIPAA team sells a cloud-based data security tool to small health care organizations at risk of data breach. She described their product like TurboTax for HIPAA compliance. Their target clients are doctor’s offices, county health departments pharmacies and community hospitals. 

The company has ready garnered 90 customers with $250,000 in revenue contracts. At this time the business is generating $20,000 per month, expected to reach $80,000 per month by this year. Sales projections are $10 million by end of 2016.

Drachenberg has made a believer out of investors so far raising $350,000 of the $550,000 needed to continue marketing their service. The company signed on with the Texas Medical Association and will soon be in front of 750 potential clients.

• SKOSAY
Justin Urso and Jason Kohring, founders of Skosay, offer small businesses a way to manage their customer service more efficiently. 

Urso said consumers today want their voices to be heard but just 1 in 27 actually say something. He said comment cards and 800 phone numbers are antiquated systems for gathering feedback and they don’t get the job done.

The local manager at Chick-fil-a in Fayetteville told Urso that he spends up to three hours a month combing through the comment cards – ime he would rather spend with his customers.

Urso explained that when a consumer has a bad experience and they don’t get it rectified, 91% won’t return. He said companies spend $60 billion annually trying to improve customer service based on feedback.

Their product provides a private two-way communication channel for customers and business owners or key managers. The comments are made in real time with chat platform on mobile web application.

Skosay has already enlisted Piggy Back shuttle service in Fayetteville and Impressed Cleaners in Bentonville to use their service beginning this fall. Northwest Arkansas Regional Airport has also expressed interest in the service. The service is subscription based at $100 a month per location for retail users, and free to consumers. The company is seeking $250,000 to take the venture from beta testing to a full sales operation within the next year.

Cade Collister, creative director at Acumen Brands, said the Skosay duo could have started their company anywhere but chose to plant their passion in Northwest Arkansas.

• CROWD TO GO
Jet Castro wants to solve the last-mile delivery problem for retailers, restaurants and consumers. He see’s his company using vetted crowd sourced personnel to deliver lunch to Wal-Mart suppliers during crunch time or run small packages from retailers to consumer homes in a particular area.

The company is seeking between $250,000 and $500,000 to fully market this alternative delivery system. He owns a software development company in Asia employing 40 developers crafting the product.

Castro said he was glad to see Wal-Mart IT execs at the demo day event and was excited they offered to schedule a meeting on his behalf.

• HUMAN LINK
Ven Vadiamani, co-founder of Human Link, said his startup was rooted in an experience he encountered recently in trying to find in-home care for his ailing 84-year-old grandmother in India. 

“I had to find that care from here in the U.S,” Vadiamani said.

Human Link applies a LinkedIn strategy to find vetted in-home health providers that best meet a consumer’s needs. He explained the system today is a franchise, a list of possible health care associates that may not be compatible with a loved-one. He said finding the right match is time consuming.

The in-home health care market is valued at $75 billion today, expected to grow to $200 billion by 2030. Vadiamani said the Human Link service does not have a subscription fee for caregivers or consumers. The company works off of a 6% to 10% fee per transaction, a cost they are working to reduce which can be passed on to the user. 

His firm is seeking $750,000 to $1 million to market their platform around the world.

• NEO
Cyber security is an ever present threat in today’s marketplace. NEO founders Justin Farmer and Travis Fischer operate a parent company known as Kernal, in which they do cyber security work in the Middle East with oil companies and government entities. 

They said this type of ongoing cyber protection is costly, and oil companies can afford the costs. However, Urso said small businesses are often not able to afford cyber security services.

Neo is a product they have developed to “democratize” a high level of cyber security down by offering it to small businesses at $49.99 per month, which includes the hardware.

The team is seeking $300,000 to $400,000 to build their team and bring the product to market. They expect a project market launch by the end of next year and said it will take selling 750 units to break even. 

Target applications for Neo includ health care HIPAA audits, the legal industry, and financial services.

FLASHBACK UPDATE
Mark Brandon, CEO of QBox, formerly Stack Search, gave the audience an update on his startup which was one of three original ARK Challenge winners in 2012.  Brandon said he’s aged 10 years in the three years and his venture has come within a week of closing at least four times but things are finally looking up.

“We have nearly 700 customers for QBox at this time and we finally became profitable in August for the first time since we launched,” Brandon said as the crowd applauded. “We are managing data on five continents today.”

He said revenue is growing at 15% to 25% each month. Brandon and his small team are ready for a Series A funding round for $1 million to heavily market the product and build out their team.

“Raising this funding has been challenging. I have been coast to coast and we have had four investors tell us they would be a second lender but we are still looking to take the lead in this Series A round,” Brandon said.

QBox helps companies manage their big data analytics in dash board format. He too, was excited to hear from a Wal-Mart executive who offered to get him a meeting with the retailer’s chief technology officer.

“That alone makes my day,” Brandon said.

Voters in the Greenwood School District will go to the polls on Sept. 16 to decide whether to increase the district's millage rate by 1.9 mils and generate an estimated $590,000 more in annual district revenue.

The money would be used to alleviate capacity issues by constructing a freshman center and realigning other grades in the district, Superintendent John Ciesla said.

The district's millage rate is 38.7 mils. Should voters approve a bump to 40.6 mils, the owner of a home valued at $100,000 could see their personal property taxes increase by $38 per year, according to figures provided by the Sebastian County Collector's Office. A $150,000 home could see an increase of $57 per year.

Ciesla said construction of a freshman center adjacent to the district's high school would add 23 classrooms to a district that saw 568 more students this year than in the 2001-2002 school year.

"It would include 23 rooms — 15 regular classrooms and seven labs for classes including science, large groups, computer labs, etc.," he said. "It would be about 53,000 square feet. One of our biggest concerns as a district is growth."

The new freshman center, with a price tag estimated to be between $10 million and $12 million, would remove freshman from Greenwood Junior High and allow the district to move fifth graders from the district's two elementary schools to a new fifth and sixth grade middle school, shifting seventh graders to a new seventh and eighth grade junior high.

The configuration of the sophomore through senior high school would remain the same, though the high school's amenities would be used by the freshman center, Ciesla said, indicating that the cafeteria, performing arts center and other facilities would be used by all four grades and would save the district money by not constructing those as part of the new campus.

Of the millions needed for the project, the state has already committed $2.3 million to the project through matching funds, Ciesla said, due to overcrowding issues in the district.

He said while there is a cost benefit for the freshman center and a space benefit for the other grades should the millage pass, there is also an issue of introducing students to high school and helping those students find success.

"Obviously you get more space, but that ninth grade year is such a transition. … Everything is starting to count as far as credits and we cut down on those transitions of students moving campuses. We have those classes just down the hall and there's an easier, smoother transition to the high school experience."

The building, which will be built by Beshears Construction should the millage pass, will have a capacity of 360-400 students. Greenwood Schools has 3,720 students from pre-K through high school at five different campuses.

As for how long the freshman center could meet the needs of the district, Ciesla said it is hard to predict because of growth happening at the north end of the district's boundaries in Fort Smith.

"With Chaffee Crossing and I-49, those are becoming a reality with growth. It is our hope that this will meet our needs for some time. But a number is hard to predict,” he said.

Should the millage pass, Ciesla said he hoped to break ground on the new freshman center by the start of 2015 with occupancy by the fall of 2016. And should the millage increase not pass, Ciesla said there is not a plan B at this time.

"We haven't decided that. We are full. It's a difficult situation. Both of our elementary schools have zero additional space. I feel like it is very important that this pass."

Early voting will begin Sept. 9 and run through Sept. 15. The special election will be held Sept. 16.

Voters in March 2010 rejected – 58% against to 42% for – a 2.8 mil increase that would have funded a third elementary building estimated then to cost $14.2 million.