Fort Smith is not the only city facing sewer overflow issues. It’s proving a problem in Van Buren, also.

According to Director of Van Buren Municipal Utilities Steve Dufresne, Fort Smith's northern neighbor is under a consent order by the Arkansas Department of Environmental Quality because of 108 manhole overflows. The overflows, he said, occurred over a three year period from October 2009 to October 2012 and were self-reported to the ADEQ.

The causes of the overflows, Dufresne said, were the result of a variety of factors.

"We have determined that for our sewer system, those overflows, which were minor during a three year period, but we figure about 10% of those were from inflow and infiltration, or rainfall and wet weather," he said.

Such overflows are similar to the problems that have been occurring in Fort Smith for many decades and has resulted in extended negotiations between the city and the U.S. Department of Justice over the city of Fort Smith's repeated violations of the federal Clean Water Act.

But in Van Buren, Dufresne said the vast majority of the problems are "routine."

"The majority are from routine stoppages from grease, debris or roots in the system," he said. "So we've determined the majority of those occurred because of grease and routine causes. And our plan for ADEQ, what we're anticipating, is we'll submit a plan and it may take them some time to review and either accept or come back and give us further guidelines."

The plan the city's utilities department would submit, Dufresne said, would focus on increasing routine maintenance and inspections to identify problems before overflows occur during dry weather periods.

"On the rain events, we are looking at what type of line replacements (are necessary) to increase capacity and at what cost."

The city utility department must have a plan submitted to ADEQ by January 2015 and he said work is ongoing to study solutions and write the plan. Since so final solution has been yet proposed by the city or approved by ADEQ, Dufresne said it would be difficult to estimate a price for improvements to comply with the consent order.

"What we're planning to submit will not be in the tens of millions (of dollars)," he assured. "But on the maintenance side, for instance, that's where there'll be more of an increase (in cost)."

According to Dufresne, the best estimate he could provide now is "up to $5 million," though he said the number could be lower. Either way, he said rate increases could be a possibility to cover any mandates handed down by the ADEQ.

"We do not have reserves to cover the costs, so yes. We're still looking at finances, but there could be a potential rate increase proposed in mid-2015 or early 2016. I can't get much more definite until ADEQ approves (the plan to address the overflows)," Dufresne said.

And while Van Buren is not dealing with the feds like the city of Fort Smith is, Dufresne said the federal government would be aware of the city's dealings with ADEQ.

"We're dealing with ADEQ, but the way I understand it is once we submit the plan to them, then it will be submitted to the EPA for review and then will be either approved by the ADEQ as is or they could respond back requiring further information or say no, we don't like what you're proposing. Right now, we're trying to decide a timeline for the milestone schedule. That's what Fort Smith has been having issues with. We're looking at options for the schedule and they may or may not approve what we may submit."

A timeline for compliance has not yet been established, though Public Outreach and Assistance Division Chief Katherine Benanati of ADEQ said the city "is to comply with the effluent limitations of its permits by the end of December 2014 and submit to the Department by January 21, 2015 a Capacity, Management, Operations and Maintenance Manual (CMOM) and a Sanitary Sewer Evaluation Study (SSES)."

Any rate increase proposals that result from the final approved plan associated with the consent order must go through the Van Buren city council for approval by ordinance adoption setting municipal water and sewer rates schedules.

Wall Street is eyeing a big payday from Tyson Foods on Monday (Nov. 17) when meat giant is reports fourth quarter and fiscal 2014 year earnings, with quarterly sales estimated by some to exceed $10 billion.

Net quarterly profit could hit $268.5 million, or 76 cents per share, which would be a gain of 8.5% from the year-ago period, according to consensus of analyst estimates. Springdale-based Tyson is expected to post quarterly sales of $10.15 billion, 14% higher in part because of the recent $8.5 billion acquisition of Hillshire Brands.

For the fiscal year which ended Sept. 30, analysts predict Tyson Foods to earn a total $2.83 per share, which equates to net annual profits of $1 billion. This would be a $182 million gain from a year ago. Annual revenue is expected to be a record $42 billion, compared to $37.5 billion in fiscal 2013.

Tyson Foods, which has predominantly been a commodity business with beef previously comprising 41% of sales, is morphing into more of a packaged food supplier as it focuses on blending its prepared foods segment with Hillshire Brands products. That said, beef and chicken still comprise the largest percentage of the business.

BEEF OUTLOOK
Commodity beef packers have been running negative operating margins for the past two months as cattle prices hit record highs and there have been fewer retail promotions to encourage consumption.

From July through September, Tyson’s fourth quarter period, beef packer margins range was between $55 per head in July to $22 per head in August, moving to losses of $40 per head in September. The losses have since widened to $75 per head as of last week, according to Sterling Beef Profit Tracker.

Tyson typically reports better numbers than the commodity beef margin indexes indicate.

Robert Moskow, an analyst with Credit Suisse, said his conversations with beef processors indicate beef margins are better than expected. Shorter beef supplies in the freezers are also giving packers the ability to raise wholesale prices. The USDA total pounds of beef in cold storage are down 20% from last year.

“We expect Tyson to enjoy similar benefits,” he noted.

Analysts expect beef operating income to be around $162 million, comparable to the same quarter last year.

CHICKEN GAINS
The chicken side of the business is rolling in cash amid lower grain costs and steady demand from food service and the retail business, in spite of higher prices.

Georgia Dock pricing on Oct. 1 for boneless, skinless breast meat was $2.19 per pound, coming down a from an annual high of $2.24 in mid July.  A year ago the Georgia Dock price was $1.90 per pound, up 24.3% year-over-year.

Operating profit estimates for Tyson’s chicken segment range from $185 million to $200 million for the quarter. A year ago the company reported $175 million in chicken profits.

Chicken margins have been high this entire year according to Ken Zaslow, analyst with BMO Capital Markets. He expects they should hold above historical averages for the foreseeable future. Zaslow said there will be support for margins from limited production growth and strong demand. He said Georgia Dock whole bird prices remained at record levels thanks to ongoing demand amid tight competing meat supplies and limited supply of small birds.

PORK SEGMENT
Moskow said the falling sow prices bode well for Hillshire Brands' profit margins in its first quarter under Tyson Foods.

Frozen pork supplies were down slightly from last year, according to the USDA report. Stocks of pork bellies were down 29% from last month, but up 136%  from last year.

Last year Tyson Foods reported flat pork results in the quarter, and a 20% drop in operating income during fiscal 2013. At $296 million, operating income for fiscal 2013 was hurt by reduced exports and tighter packer margins.

Analysts expect pork profits to be higher than a year ago.

PREPARED FOOD
This segment is poised to be much stronger than a year-ago after the recent marriage with Hillshire Brands. The prepared foods segment is poised to go from being 9% of company’s total sales to 18%, according to company projections.

Because Hillshire Brands is primarily a branded, higher margin business, Tyson expects a positive push on its net operating income. Prior to the acquisition, Tyson’s prepared foods segment comprised just 5% of the company’ overall operating income. The pro forma company has prepared foods with 20% of the total operating income.

During Monday’s earnings report, analysts are expecting Tyson management to provide some details on the assimilation of Hillshire into its business model. Tyson already announced closure of its older plants, and production shifts. Locally, Tyson Foods laid-off roughly 50 back office staff in its corporate offices.

Insiders at Tyson Foods told The City Wire that worker sentiment inside the corporate headquarters has been tense following the lay-off and the unknown of what this acquisition will mean for more local jobs changes.

Tyson shares traded 3% higher on Thursday (Nov. 13) at $41.18, up $1.31. For the past 52 weeks the share price has ranged from $27.85 to $44.24.

For anyone expecting a solution to the crisis facing the city of Fort Smith's general fund following Thursday's (Nov. 13) first budget meeting, keep waiting.

The nearly four and a half hour meeting touched on all the departments that make up the $48 million general fund operating budget and City Administrator Ray Gosack's proposed budget cuts and revenue enhancements proposed earlier in the week.

While Gosack has proposed fee increases and cuts to various city departments – namely the police and fire departments to the tune of about $1 million – one new funding possibility came from Fire Chief Mike Richards that would assist with the police and fire pension contribution fund, which is projected to go broke in 2019.

Richards said he had notified Gosack of a formula change the city could implement with the pension contribution fund that would free up about $400,000 per year and would help shore up the fund going forward.

Since Jan. 1, 2004, Richards said the city has been using a base multiplier of 3.28 for the pension contribution fund. When the base multiplier was adopted, the city had an $11.863 million balance in its pension contribution fund and was adding $1.346 million annually to the plan. That was before the financial crisis of 2008, when the plan started withdrawing more money than the city was putting in, setting it up for the eventual insolvency projected for 2019.

But Richards said the city has the option to revert back to a base multiplier of 2.94, saving $400,000 that can be put toward shoring up the plan. He said since many on the police and fire departments have worked long enough to have had contributions under both multipliers, the difference in retirement age would not be greatly impacted.

As an example, he said employees who worked an entire career under the 3.28 base multiplier would have to work 30.5 years in order to receive their complete retirement, while those at a 2.98 multiplier would have to work for 34.1 years.

"The difference is somewhere in the middle," he explained.

The funding solution, Richards said, was something that was known by LOPFI administrator David Clark when he met with the Board of Directors earlier this fall about the pension contribution fund shortfall, but was not discussed with city administration until he broached the subject during discussions on possible budget cuts.

Richards said he is not necessarily advocating for the change in base multiplier formulas, but since the state would allow a change and the city is in a financial bind, it is worth considering.

"Knowing the situation we're in, it has to be considered," he said. "I'm not for or against it, but it must be considered."

Richards acknowledged that the change would simply be part of a solution, not the entire solution.

The Board also discussed possible fee increases, with outgoing City Director Philip Merry proposing implementing Gosack's suggestion of a business fee projected to bring in $1.8 million annually, along with other fee increases including franchise fees on home telephone, cable and other services. Merry's collective suggestions, he said, could raise more than $2 million and he proposed finding budget cuts of $400,000 to offset some of the increases. His proposal included no funding cuts, with excess funds intended to fund the pension contribution fund for police and fire. Gosack told the Board that even if it threw $600,000 each year toward the fund, it would only delay insolvency by one year to 2020.

On the other hand, City Director Keith Lau said it was irresponsible to not include possible staff reductions in any budget cut proposals and said his constituents are demanding any fee increases be coupled with "cutting of heads."

Another aspect of the wide-ranging discussion on budgets was the city's self-insured health coverage, which has seen increases in the cost to the city of Fort Smith from the city paying 60% of the cost for employees in 2012 to 68% now.

Fort Smith Director of Human Resources Richard Jones told directors the total is still below the national average of 70%. Director Kevin Settle asked for the city’s costs per employee compared to other cities in the region, but Jones did not have those numbers immediately available.

While it does not appear that city employees will see a pay increase, City Director-Elect Tracy Pennartz pitched the idea of pay raises for city employees while at the same time raising the employees' share of healthcare costs. She said it would benefit the employee long-term due to the retirement benefits the employees would receive through higher base pay, even if the pay increase itself was not seen due to higher health insurance premiums.

The next budget meeting is set for Monday (Nov. 17) at 6 p.m. in the community room of the Fort Smith Police Department. The focus of the meeting will be enterprise funds, with Settle proposing a possible third meeting to address funding solutions on Nov. 20.

Freezing weather and the potential for winter precipitation did not deter hundreds of people from waiting in line for almost two hours to get a glimpse of former President George W. Bush at his book signing in Bentonville on Saturday, (Nov. 15).

President Bush said he chose to pen his father’s memoirs in part because George H.W. Bush — 41st U.S. President at age 90 has not done so himself. The book signing for “41: A Portrait of My Father,” took place at the Walmart Supercenter on Walton Boulevard after the former president was a special guest at the retailer’s monthly Saturday morning meeting at the corporate offices across street.

The book covers the entire scope of the elder President Bush's life and career and shines new light on the accomplished statesman known best by his family.

Event security was high. Shoppers who purchased the book ahead of time were given a red wrist band which they had to present at the store with their book before they could get in line for the signing. The crowd began to gather in the store around 8 a.m. for a signing which began at 10 a.m. The parking lot was full by 9 a.m. Overflow parking was also full at the Peel Mansion and on the grassy areas between the fueling station by 9:15.

Keith Branson and his 10-year-old son Tucker from Siloam Springs were some of the first people to get into the private signing quarters which took place in the garden center of the supercenter. Branson said they got to the store around 8 a.m., and they wouldn’t miss an opportunity to see President Bush even if it was just a quick exchange.

By 9:15 the line began snaking around the massive store weaving in and out of nearly every aisle in the general merchandise section of the store. The scene looked like a Black Friday event except for the higher security and individual searches conducted by the Secret Service. Numerous local enforcement officers were also in attendance to help with crowd control.

The massive garden center where of the holiday seasonal merchandise is displayed was cleared and closed to the public during the signing which wrapped up around noon. Wal-Mart declined to say how many additional store staff was called in to help with the event, but corporate spokeswoman Kayla Whaling said reinforcement was brought in from other area stores to help with crowd control.

“We know how to hold these types of events,” she added.

David Orrick drove from Fort Smith and left his home around 6:30 a.m. and arrived at the store around 8 a.m. He purchased his book at the electronics counter and got in line. Orrick was one of the last red wristbands given out. Blue wristbands for the wait list were given after that time. Wait listed shoppers were not guaranteed to see the President Bush, because he was slated to sign books for two hours.

“It was great. I can check this off my bucket list,” Orrick said. “It wasn’t bad at all. The line moved rather quickly.”

The former president took time to greet each of the shoppers and look them in the eye as he signed book after book placed in front of him by event coordinators. Secret Service detail was within two-arms length of the president at all times during the signing.

Jim Gintner, from Cambridge, England, emerged from the signing room with two autographed books in hand. Gintner, visiting his friend Dean Goodman of Bella Vista, said he never dreamed he would get see a U.S. President during his month-long visit in the states.

“We heard about it on the television yesterday, so we ran over here and purchased the books last evening around 9 o’clock. I am a fan of President Bush. I volunteer at the World War II 100th Bomb Group Memorial and helped the U.S. team with their publication design and photo restoration,” Gintner said.

He said every other year the 100th Bomb Group volunteers meet in a different U.S. city for a reunion. In 2001. He said they met in Omaha shortly after the Sept. 11 terrorist attack.

“President Bush sent our organization a letter of thanks for our volunteer efforts to keep the memory and honor of the 100th Bomber Group alive. That memo was signed by the President and dated Sept. 11, 2001. When we read this memo and remembered the magnitude of what happened that day, we were in awe,” Gintner said. “To meet this U.S. President in person is truly a once in a lifetime opportunity for a Brit like me. It caps off a wonderful visit to the U.S. and a completely unexpected last-minute surprise. … I returning home tomorrow.”

Marilyn Phillips, a recent transplant to Bentonville, volunteered in President Bush’s campaign when she lived in Minnesota.

“I can’t believe he’s really here. I wouldn’t have missed this,” Phillips said as she made her way to his signing table.

Jennifer Green and her young Republican friends from the University of Arkansas were also excited as they entered the signing room around 10:15 a.m. She purchased two books, one for herself and a Christmas gift for her dad.

“Who wouldn’t want a chance to meet a U.S. President,” Green said.

At 80, Danniella Signorino said she couldn’t believe she was able to meet President Bush. She was with her family who recently located to Northwest Arkansas from Long Island, N.Y.

“I have waited a long, long time to meet a U.S. President. It’s a first for me,” she said. “It was a great pleasure.”

Thanks to an operating income boost of 20% and record annual sales of $37.58 billion, Tyson Foods blew past market expectations and posted quarterly income of 87 cents per share and fiscal year income of $2.94 per share.

The consensus of analyst estimates was the company would earn 76 cents in the quarter and $2.83 for the year.

Fiscal year revenue of $37.58 billion was well ahead of the $34.374 billion in the previous fiscal year, with annual income of $864 million, up 11.05% over the 2013 fiscal year.

Fourth quarter revenue was $10.105 billion, up 13.6% compared to the previous fourth quarter. Income in the quarter was $469 million, up over the $416 million in the 2013 period.

The solid results and an optimistic outlook sent Tyson shares up nearly 5% in active trading at Monday’s (Nov. 17) market opening. Shares were up $2 to $42.68 in the morning session, according to Yahoo! Finance.

"Two years ago, I told our team members, 'The turnaround is over; it's time to turn it on.' They did and the proof is in our second year in a row of record sales and earnings," Donnie Smith, president and CEO of Tyson Foods, said in the earnings report issued early Monday (Nov. 17).

Leading the way for Tyson Foods during the fiscal year was the chicken segment which recorded $883 million in operating income, well ahead of the $683 million during the previous fiscal year. Sales in the segment totaled $11.116 billion, up over the $10.988 billion in the previous fiscal year.

CHICKEN POTENTIAL
The company said higher demand for chicken and lower feed costs helped the segment grow operating income at a faster pace than total segment sales. Feed costs in the segment were down $140 million in the quarter and down $600 million for the fiscal year.

Smith said there were some hiccups in the fourth quarter which negatively impacted the chicken segment. He said plant disruptions and increased demand forced the company to buy more breast meat on the open market during the peak summer months. 

Tyson began supplementing its chicken production with a “buy versus grow” program more than two years ago. The company found it cheaper to buy breast meat on the open market that is run through its further-processing facilities and marked up accordingly for sale to its customers, as opposed to growing that production. The “buy versus grow” model is still a small part of the company’s total production, Smith said.

“We bought a 100 loads of breast meat per week this summer so we could satisfy our customer demand. This added about $1.5 million to $2 million in weekly costs to our chicken production. In a normal situation, we would have bought 50 to 55 loads. The supply disruptions have been addressed and we were able to keep our valuable customers happy,” Smith said.

Smith expects chicken production to be up 3% in fiscal 2015, which began Oct. 1 for Tyson Foods. He said there are a couple of shifts taking place with the consumer — a move to more fresh chicken in the retail case and uptick in fully-cooked frozen sales. In response, he said the company is adding more capacity in these areas. Two further processing lines opened Monday (Nov. 17) in the Rogers plant, and there are new lines coming to a plant in Broken Bow, Okla. In 2015 a complex in Georgia is being updated to handle more tray pack (fresh) product for retail.

Smith believes higher beef costs will continue to push more consumers toward chicken, and he doesn’t believe lower gas prices will mean they trade back up to beef.

“We see more people eating out with the relief they are getting in gas prices, which should benefit food service customers,” Smith said. “We also see a structural demographic change in demand as more Millennials enter the workforce they index higher toward chicken than previous demographics. We expect to see food service customers begin to offer more chicken promotion in the coming months as supplies come back up.”

Smith said the retail trade toward chicken became apparent in the past four weeks. He said fresh beef pounds were down 22% and price rose 15%. In the same period, chicken pounds rose 3.3% and the price was up 2.7%.

BEEF CONSTRAINTS
Operating income in the beef segment was $153 million in the fourth quarter, down from $162 million in the same quarter of 2013. For the full fiscal year operating income in the segment was $347 million, better than the $296 million in the previous fiscal year.

“Operating income decreased for the fourth quarter of fiscal 2014 due to higher fed cattle costs and periods of reduced consumption of beef products, which made it difficult to pass along increased input costs, as well as lower sales volumes and increased operating costs,” the company noted in the earnings report.

Smith said higher beef prices are going to be a reality for some time because they are directly related to supply issues. In 2015, Smith said there are more indications of heifer retention which is an early sign of herd rebuilding. 

He warned that Tyson’s beef segment profitability will be below the fiscal 2014 levels.

“We expect to see a reduction of industry fed cattle supplies of 4-to 5% in fiscal 2015 as compared to fiscal 2014. Although we generally expect adequate supplies in regions we operate our plants, there may be periods of imbalance of fed cattle supply and demand,” Smith said.

Data for federally inspected slaughter through Nov. 1 indicates that total cattle slaughter was down 7.2% for the year to date compared to last year. 

FATTER PORK 
Tyson’s pork segment had another good year with fiscal year sales hitting $6.304 billion, better than the $5.408 billion in fiscal 2013. Operating income for the year was $455 million, up 37% over the 2013 tally. The company said higher demand for pork along with higher sales prices related to decreased pork supplies helped the segment.

Tyson said it was able to balance supply and demand in the quarter in spite of lower pork exports and consumption levels.

“We expect industry hog supplies to increase around 2-to 3% in fiscal 2015 compared to fiscal 2014. For fiscal 2015, we believe our Pork segment's operating margin will be in its normalized range of 6-to 8%,” Smith noted in the release.

MERGER SYNERGIES
The company said it is “pleased with the progress” made in integrating the $8.5 billion acquisition of Hillshire Brands that closed in late August.

"Although it's still early in the process ... We've identified the synergy targets, and now we're working to bring those dollars to the bottom line,” Smith said in the earnings report. “We're very confident we'll meet the expected synergy amounts of $225 million or more for fiscal '15 and more than $500 million by the end of year three, and when we get there in fiscal 2017, we expect the Prepared Foods segment to earn a 10-to 12% return on sales.”

The prepared foods segment posted fiscal year sales of $3.927 billion, up over the $3.322 billion in fiscal 2013. However fiscal year adjusted segment operating income was just $53 million, down from $101 million in the 2013 fiscal year. In addition to a $210 operating income hit related to higher raw materials costs, the company also saw its fiscal year operating income reduced further by $113 million “due to additional costs associated with the Prepared Foods improvement plan, Hillshire Brands post-closing results, purchase price accounting adjustments and ongoing costs related to a legacy Hillshire Brands plant fire.”

Smith said he’s been a part of several acquisitions through the years and the Hillshire deal has been by far the smoothest transition of them all. The first three months were spent getting the new organization structure in place which officially begins Dec. 1.

“We have teams working on synergy capture and creating business plans around those savings,” Smith said.

Once of the first areas beyond the low hanging fruit synergies has been the shared service contracts. He said the pro forma company uncovered $15 million to $25 million in freight savings this year when combining the two operations.

“We are just getting started on the deeper layers of synergy capture,” Smith said.

He said the company will keep its research and development teams working at their respective Discovery and Innovation Centers in Springdale and Downers Grove, Ill., with one top management team led by Sally Grimes, overseeing both facilities.

“It doesn’t make sense to uproot families. Managing them on location is a far better option for Tyson Foods,” Smith said.

FORWARD LOOK
The company is optimistic about fiscal year 2015, with its projected guidance set at per share earnings to range between $3.30 and $3.40. Prior to Monday’s earnings report, the consensus analyst estimate was for fiscal year per share earnings to be $3.33.

Tyson projects its fiscal 2015 revenue to top $42 billion, after a full year of integration with Hillshire Brands. Tyson announced capital spending of $900 million for fiscal 2015 on projects that will create more shareholder value, but no details about the spending were included in the release.

The company said it continues to use its strong cash flow – $1.2 billion annually – to pay down debt and execute more value-added sales for year to come.

In an unusual move, Tyson management spoke briefly about 2016 projections.

“We have a lot to be confident about in the future. We expect to restart our buyback in 2016 and feel really good about Tyson 2.0.” Smith said.

He said the sale of the Brazilian business should close next month and the divestiture of Mexico will close shortly after calendar 2015 begins. These cash proceeds ($575 million) will be applied to outstanding debt incurred in the Hillshire acquisition.

Enplanement growth continues to be impressive in Northwest Arkansas and Fort Smith commercial airports, with possibly by early December the Northwest Arkansas Regional Airport (XNA) breaking an enplanement record that has stood since 2007.

XNA traffic reached 598,886 in 2007, but did not continue growing when the national economy entered the Great Recession. Enplanements at XNA fell to 540,918 in 2009 after reaching the 2007 high.

However, XNA enplanements for the first 10 months of 2014 total 542,258, up 10.74% compared to the same period of 2013, and up 8.27% compared to the same period in 2007. October enplanements at XNA totaled 58,224, up 7.98% compared to October 2013.

“I haven’t thought about that. You know, that might be a good idea,” said Kelly Johnson, director of the Northwest Arkansas Regional Airport, when asked if airport staff were planning a celebration of a new record.

As to why XNA traffic is on a record pace, Johnson said “the general economy picking back up has been a real godsend,” and fare prices at XNA are down more than 4.5%. She also said airport officials observed more “discretionary travel” during the summer than in years past.

For all of 2013, XNA enplanements totaled 579,679, up 2.58% compared to the same period in 2012. The enplanement growth remained stable through the year, with enplanements up 2.42% at the end of the first quarter of 2013. Enplanements at XNA totaled 565,045 during 2012, up just 0.4% compared to 2011. Although slight, the gain prevented XNA from posting two-consecutive years of enplanement declines. XNA’s first full year of traffic was 1999, and the airport posted eight consecutive years of enplanement gains before seeing a decline in 2008.

FORT SMITH TRAFFIC
The Fort Smith Regional Airport, served by flights from Atlanta and Dallas-Fort Worth, posted October enplanements of 8,830, up 19.2% compared to October 2013.

Enplanements for the first 10 months of 2014 total 77,610, up 9.04% compared to the same period in 2013.

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

Based on monthly averages, Fort Smith enplanements could reach more than 93,000 in 2014. The last time enplanements were above 100,000 was in 2005, with 102,607. The last year enplanements were above 90,000 was in 2007, with 99,217.

With 45,039 enplanements for the first 10 months of 2014, American Airlines accounts for 58% of commercial traffic out of Fort Smith. Delta Air Lines had the remaining market share – 32,571 enplanements – for the first 10 months of 2014.

American enplanements out of Fort Smith are up 8.85% for the first nine months of 2014 compared to the same period of 2013, and Delta enplanements are up 9.3%.

Enplanement numbers should remain positive at XNA and Fort Smith for the holiday period. Airlines for America, the trade association for the commercial air travel industry, projected 24.6 million will travel globally on U.S. airlines during the 12-day Thanksgiving travel period (Nov. 21-Dec.2). If the estimate holds, it would be a 1.5% gain compared to the holiday travel period in 2013.

“An expanding U.S. economy, rising personal incomes, employment growth and lower energy prices are driving growth in demand,” A4A Vice President and Chief Economist John Heimlich said in the statement. “There is no better time to fly than now, as airfare remains one of the best consumer bargains in America, given its superior speed and price versus other modes of travel.”

The busiest travel day is expected to be Nov. 30, with the lightest travel days likely to be Nov. 27-28.

LITTLE ROCK TRAFFIC
The national economic trends helping boost growth at XNA and Fort Smith are not doing the same for the Bill & Hillary Clinton National Airport (Little Rock National Airport).

Enplanements for the first nine months of 2014 totaled 783,084, down 4.95% compared to the same period in 2013. September enplanements were 80,800, down 4.57% compared to September 2013.

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

The Fort Smith Regional Airport will face a $450,000 deficit in its operating fund for fiscal year 2015 and the blame can rest with the new mission of the 188th Wing, according to airport Executive Director John Parker.

Parker said with the new unmanned mission at the 188th, the airport's revenues and expenditures have taken a hit.

"It's the guard's change of mission, which resulted in the termination of the joint use agreement," he said. "The joint use agreement provided a payment to the airport for those services that we did to maintain the runways and taxiways so the guard could utilize our airport. At the same time, that document provided the ARFF (Aircraft Rescue and Fire Fighting) services through the National Guard. So that agreement entailed a payment for services we provided and also a document for services from the guard in lieu of other payments.”

In recent months, the airport has had to approve a $251,000 contract through fiscal year 2014 with Pro-Tec Fire Services to provide FAA-mandated firefighting protection at the airport using equipment and facilities through an agreement with the National Guard Bureau in Washington, D.C. The contract for the company's second full year of operations will total $258,000.
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Parker said with the costs due to having to pay for firefighting protection once provided by the 188th, as well as the loss in revenues for services provided by the airport in maintaining the runways for the Guard, the airport will post a loss of $450,500 for fiscal year 2015 based on expenses of $2.972 million and revenues of only $2.522 million.

To cover the losses, which could run close to $500,000 when factoring in deficit spending from fiscal year 2014, Parker said the airport commission will have to dip into about $1.4 million in reserves to keep the airport operating at capacity. The decision to dip into reserves, he said, was not unexpected, noting that the commission was building the airport's savings in anticipation of a change in the Air National Guard's mission at the airport.

But the airport cannot operate in the red for too many years, Parker explained, due to FAA regulations tied to grants the airport has received in recent years and for that reason, the agency has granted permission for the airport to renegotiate its $1 per year lease with the National Guard Bureau for the 142 acres of land its base occupies at the Fort Smith Regional Airport.

"If we don't successfully get a negotiation with the Air National Guard or the National Guard Bureau by 1 October 2016, we will not be eligible for future (FAA) grants, so that's a big deal," he said. "And it's all tied together. The FAA didn't require us to have more money against that lease because of realized value of services provided, AARF (firefighting) services. Now with all that going away, they're requiring us to negotiate for a more fair market value on the properties they have under lease.”

Letters, he said, had already been sent to the Guard Bureau in Washington to negotiate a fair market value for the lease, adding that "the FAA has stated their position from the associate administration level. That's as high as it goes in airport compliance terms to the Guard Bureau that this is the position.”

As for what that fair market value could be for 142 acres on airport land, Parker said it was an unknown at this time, pointing out that the military would have to go through a valuation process to determine what price it should pay the Fort Smith Regional Airport.

Should the airport and the Guard Bureau come to an agreement on a ground lease, Parker said there was an expectation that the Guard would also refund monies the commission is taking from reserves to pay the bills for the next two years.

And with any agreement that may result in additional revenues for the airport, Parker said he hoped to return the airport to profitability. Fort Smith Regional Airport posted profits of $262,567 in 2011, $251,363 in 2012 and $135,477 in 2013.

The proposed budget was presented to the airport commission in October, with a vote expected at the commission's Nov. 25 meeting, Parker said.

After three and a half hours of discussion, analysis and frank comments by a department head on Monday (Nov. 17), the Fort Smith Board of Directors will hold another budget meeting on Nov. 25 to review City Administrator Ray Gosack's proposed method for reducing costs and raising revenues to budget for a 1% cost of living (COLA) raise and step and merit raises for all city staff.

The evening's budget discussions started with a review of enterprise funds, including the civic center, utilities, and streets followed by a discussion of outside agency and non-departmental funding.

Following a review of the enterprise and non-departmental funds, City Director Philip Merry presented his proposal that would provide the 1% COLA and step and merit pay increases at a cost of $644,880. Merry's figure cites a previous total provided by Gosack.

In order to fund the raises as well as fund increased contributions to the quickly depleting police and fire pension fund, Merry proposed a combination of instituting a business license fee that could bring in $1.8 million; increasing franchise fees from 4% to 4.25% on gas, electric, telephone, and cable television that could raise $412,000; imposing an additional 1% on cable television franchise fees to raise $129,000; raising alcohol-related permits and fees to bring in an additional $89,000; and increasing fees at Oak Cemetery to raise an additional $25,000.

Coupled with Merry's proposed $2.455 million in revenue enhancements was a proposal to cut $394,395 from the city's budget for a total additional revenue of $2.849 million.

When subtracting $644,880 from the total to account for the 1% COLA and step/merit raises, Merry's plan would still add $2.205 million to the city's coffers that he suggested could be thrown toward the pension contribution fund, which is expected to go broke as soon as 2019. Gosack's proposed budget for fiscal year 2015 already included an additional $600,000, but he noted that it would only delay the insolvency of the fund by one year to 2020.

Prior to the Board directing Gosack to identify areas where he could cut to afford the pay raises for city staff, City Director Keith Lau pointed out that Gosack's proposed budget only had a 7.5% reserve, or $3.46 million, set aside. In previous years, the fund has ended with 17.8% (FY2011), 19.7% (FY2012), 15% (FY2013) and is expected to end FY2014 with 11.7%. The dollar amounts are $6.88 million (FY2011), $7.34 million (FY2012), $10.07 million (FY2013) and $5.59 million (expected FY2014).

But Lau pointed out on page 22 of the proposed budget Monday, just as he did last week during a four and a half hour meeting on the budget, that the city has policies in place for how to deal with reserves dipping below 15% as is expected with FY2014.

"If the contingency reserve is between 10% and 14.99%, then operating and capital reductions will be required," the policy reads. "If the contingency reserve is between 5% and 10%, then personnel reductions, including service will be implemented.”

Lau noted to Merry, "If you give your increases and you continue to spend down in your fund balance, we're going to be negative in 2017 or '16 in the general fund balance.”

City Finance Director Kara Bushkuhl told Lau that the city always conservatively budgets but ends up with larger ending balances than it projects and said the general fund would not end up in the negative because any remaining reserves in each fiscal year are rolled over into the next year's general fund budget. While it sometimes results in the city showing it spending more than it takes in in revenue, she said it balances out and said it was "the difference" between government budgeting and private-sector budgeting, an explanation that did not sit well with Lau and prompted him to bring back to life a phrase he coined during last year's budget meetings.

"If you don't stop that, you're going to have $1 million in the bank at the end of 2016," he said, to which Bushkuhl replied that the city would have more than $1 million available by that date.

"That's faith-based budgeting," Lau replied, later adding that the city was essentially "robbing Peter to pay Paul.”

City Director Mike Lorenz voiced support for Lau's stance on the 15% reserve, though in the end no action was taken to ensure the fund balance increases with focus shifting to proposed pay raises. Lau said even if Merry's proposal were fully implemented, it would still fall short of what he said is $3.4 million needed to fully fund the pension contribution fund and have available reserves at 15%.

And none of the discussed plans Monday included any possible funding to address federal mandates from the U.S. Department of Justice to address the city's decades-long violations of the federal Clean Water Act. Mayor Sandy Sanders said a ruling could come from the DOJ within weeks, with Utilities Director Steve Parke telling the Board he could be returning to the Board either next month or early in the new year to approve rate increases to pay for whatever order is handed down by the feds. Neither confirmed that a deal had yet been reached with the federal government.

The city and the DOJ recently met in Dallas in a last ditch effort to avoid litigation following the city's announcement that it expected a lawsuit by the feds following a breakdown in negotiations. The latest meeting was organized by Attorney General Dustin McDaniel, D-Ark.

During Monday's budget hearing, Parke and Sanders voiced opposition to Merry's proposal to impose franchise fees on water and sewer utilities due to the coming settlement. Merry asked whether the money to comply with the consent decree would come from the general fund (it would not) and why it was being discussed in relation to fee increases, to which Vice Mayor Kevin Settle sternly said, "Because the citizens are going to bear the cost.”

As the meeting was winding down and the Board was narrowing its proposals for Gosack to work through before next week's meeting, Lorenz suggested as a cost saving measure freezing or eliminating positions that had been vacant for several months or longer but were still being included in the budget proposals for city departments. Parke had told the Board during his earlier presentation of his budget that vacant positions in the utilities department were having duties split between employees and in some cases, having service suffer to leave a position open during slow revenue periods before filling a position.

With Lorenz proposing leaving the positions vacant to save money, Parke rose from his seat in the middle of the room and said Lorenz's proposal was going to hurt all department heads across the city.

"I think we have some department heads among us who have managed to run things like a business, but then we're not being rewarded or recognized if we do those things," he said.

A meeting location has not yet been announced for next Tuesday's meeting at 6 p.m.

Additionally, Lau has requested an executive session for tomorrow's (Nov. 18) regular Board of Directors meeting. Asked why he called for the session, Lau would only say it was to deal with a personnel matter. Executive sessions are closed to the public.

Arkansans were feeling better about the state of the economy heading into the fall, rebounding from negative sentiments earlier this summer when consumers across the state were feeling gloomy about their current economic conditions and long-term prospects, according to the Fall 2014 Arvest Consumer Sentiment Survey released Tuesday (Nov. 18).

The current consumer sentiment index for Arkansas is 68.1, up from 67.4 in June’s inaugural survey. The national consumer confidence index as reported by Thomson Reuters and the University of Michigan was 86.9 for October, up from 82.5 in June.

“Just as national consumers expressed more positive attitudes in October than in June, Arkansans also reported feeling a bit better about current economic conditions and the longer term outlook,” said Kathy Deck, Director of the Center for Business and Economic Research, Sam M. Walton School of Business at the University of Arkansas at Fayetteville.

“Sentiment is strongest among the young and well-educated, so as the Arkansas workforce shifts in those directions, we expect to see more upbeat numbers,” said Deck, lead economist for the Arvest survey.

Incidentally, the Arkansas and national survey mirror the recent changes in gasoline prices and home values, which are leaving consumers across the state with more discretionary cash and better homeowner equity. The average price of regular gasoline was $2.91 last week, according to the Energy Information Administration, down from $3.64 in late June. In Arkansas, pump prices have dropped even lower to an average of $2.62 per gallon, according to AAA’s daily fuel gauge.

Home sales in Arkansas’ four largest markets rebounded in September, with year-to-date sales up almost 4% and the value of homes sold up almost 2%. September sales in the four markets were up 7.26% and the sales value was up more than 9%.

According to the Arvest survey, the largest gains among Arkansas consumers surveyed in September and October came from three specific areas: 18- to 24-year-olds, respondents with a bachelor’s degree, and Arkansans who are unemployed.

Younger workers entering the job market index jumped from 54.8 in June to 92.4. College graduates also also enjoyed a big jump, from 60.8 to 74.5. On the other end of the scale, optimism among Arkansas’ unemployed workers rose 57.3 to 66.5.
Regionally, Missouri showed the biggest change in the survey’s three-state region, jumping from 68.6 to 77.4. Oklahoma, meanwhile, was the only state to show a decline, from 76.4 to 72.6.

“We’ve been excited to see how consumers’ opinions in Arkansas have changed since our initial survey in August,” said John Womack, chairman and CEO of Arvest Bank of Central Arkansas. “These results seem to show that Arkansas consumers are gaining confidence in the economy and their personal financial situations, too. Viewing that optimism through these results helps us know how to better help meet the financial needs of consumers.”

The Arvest Consumer Sentiment Survey is conducted by the Center for Business and Economic Research (CBER) in the Sam M. Walton College of Business at the University of Arkansas. The University of Oklahoma’s Public Opinion Learning Laboratory conducted the 1,200 phone surveys. CBER, Missouri State University and Oklahoma City University provided state data analysis.

The survey is conducted twice a year, with the next survey expected to be completed in May 2015. With each study, the index score will be released first, followed by additional information regarding specifics of consumer outlook for the near future and plans for savings and spending.

Technology and a slight return toward tradition may change nationwide the typical Black Friday shopping rush associated with Thanksgiving. Store opening rules in the Fort Smith and Northwest Arkansas malls appear flexible with retailers. Large retailers like Little Rock-based Dillard’s and smaller retailers like Fort Smith-based Candy Craze will close on Thanksgiving.

While Wal-Mart Stores, Target, Macy’s, Kmart and other large retailers are planning to open and be aggressive with sales and promotions for Thanksgiving and Black Friday, the list of retailers planning to remain closed is somewhat larger than last year. In addition to Dillard’s, Sam’s Club, Costco, GameStop, T.J. Maxx, RadioShack, Marshall’s, Bed Bath & Beyond, Crate and Barrel, and Barnes and Noble are a few of the retailers who will not open on Thanksgiving.

The trend toward more stores being open on Thanksgiving has escalated in recent years, with 2013 marking the first time that some major retailers like J.C. Penney were open on the holiday.

Although there has been more backlash this year against having employees work on the holiday, Steve Osburn, director at management consulting firm Kurt Salmon, said in a recent Daily News Journal report that consumers are becoming acclimated to the idea of shopping on Thanksgiving.

“Consumers have started to accept that shopping on Thanksgiving is a growing habit. With consumer acceptance comes more people shopping,” Osburn said in this report.

Wal-Mart Stores spokesman Randy Hargrove said Wal-Mart is a service company and will be open on Thanksgiving to help customers.

"Most of our stores have been open 24-hrs for more than 25 years – since 1988. Just like restaurants, gas stations and airlines, we see our self in the service industry and remain open as a service to our customers on Thanksgiving. We are the largest grocer in the U.S. and are open for customers needing their forgotten pie crusts, a prescription filled, gas for their car,” Hargrove said.

CANDY CRAZE CLOSED
Tim Bailey, CEO of Fort Smith-based Candy Craze, was not willing to ask employees to work on Thanksgiving, saying in a memo to employees that working on the holiday “seems like too much to ask, just to make a little extra money.” Candy Craze has 31 stores – including one in Fort Smith and two in Northwest Arkansas – in 10 states and employs about 150.

“(W)eighing heavy on my heart and mind is you. Each of you sacrifice time with your families and work inconvenient schedules all year long to operate your stores at peak efficiency,” Bailey noted in his memo. “But Thanksgiving Day is one of the only three days a year that we are closed, and it’s one of the most special days of the year for many of us. … I don’t want any of us to have to work on Thanksgiving Day and I don’t want any of us ‘day people’ going in at midnight and working all night long.”

Bailey said Candy Craze will have a special deal on what he renamed “Sweet Friday” that will give customers a $5 gift certificate who purchase a pound or more of bulk candy.

Closing Candy Craze may come at an economic cost to the company, Bailey admitted.

“I anticipate that most of our malls will be pretty busy and that we will have the opportunity to make a lot of sales and maybe get a good jumpstart on the all-important Holiday Shopping Season,” Bailey wrote.

He also said his family will not shop on Thanksgiving Day.

“I’m not being radical about it or boycotting stores that choose to open that day. I respect other’s choices. But maybe if enough people choose not to shop on Thanksgiving Day, the malls and other retailers will conclude it just isn’t worth the trouble to be open. If not, this will be an even tougher decision next year,” Bailey wrote in the memo.

MALL MOVES
At Central Mall in Fort Smith, the mall is set to open at 6 p.m. on Thanksgiving and close at midnight. The mall is then set to open at 7 a.m. on Friday and close at 10 p.m. Mall officials said there is no blanket rule for shop owners and often the individual lease agreements dictate when they are to be open.

Rhonda Bramell, marketing manager of the Northwest Arkansas Mall, said they met with major retailers to determine their holiday operational plans. She said those corporations send down the final edict of when they expect stores to open. The mall will open its main doors at 8 p.m., Thanksgiving night and most of the larger retailers will open for shopping. She did not have a full list, but said last year roughly half of the mall merchants were open at some point Thanksgiving night. She said some opened for a few hours and then closed for two hours to restock ahead of the Black Friday rush.

"Last year there was a big crowd waiting outside when the mall opened its door at 8 p.m. We expect the same this year." Bramell said.

David Faulkner, general manager of Pinnacle Hills Promenade in Rogers, said the mall will open at 8 p.m. just as it did last year giving each individual retailer the option to open or remain closed until Black Friday. He said about 60% of the retailers and merchants were open during the evening of Thanksgiving 2013.

Because Pinnacle Hills Promenade is an outdoor mall, each store has its own front door facing the street. Inclement weather may hinder crowds because shoppers are in the weather each time they move to a different store. Faulkner said the crowds were good last year, and he expects most of their merchants will open for business at some point on Thanksgiving evening.

Bramell and Faukner each said their respective mall management does not dictate that a merchant open on Thanksgiving Day, but many of the smaller business owners tend to follow the lead of larger retailers and the majority of them plan to open.

WHAT’S AT STAKE
It’s not necessarily a simple or easy decision to remain closed on Thanksgiving, especially among large retailers.

The National Retail Federation has said consumers will spend $50 billion in just the first weekend after Thanksgiving. The NRF said 44.8 million shopped on Thanksgiving Day in 2013, up 27% from 2012. The average shopper spent $407 on Thanksgiving Day in 2013, down 4% compared to 2012.

More than 92 million shopped on Black Friday in 2013, according to the NRF, with 248.7 million shoppers in stores and online over the Thanksgiving shopping period in 2013, up 0.5% over the previous year.

Retailers like Wal-Mart, Target and Toys-R-Us have already kicked off holiday savings events on Nov. 1. These and other retailers are trying to woo shoppers early, well ahead of Black Friday. It's unclear if attempts to attract early bird shoppers will work. Research indicates that consumers tend to focus the majority of shopping in December and more are buying online.

Deloitte anticipates a 13% increase in holiday spending, based on a survey of 5,000 consumers, with average expenditures of $1,299, including gifts, socializing away from home, entertaining, non-gift clothing, and home furnishings. Spending on gifts alone is expected to climb 9% to $458 this year, from $421 last year. That’s a bigger gain than the 4.1% predicted by the National Retail Federation.

And for the second year in a row, Deloitte says the Internet is the No. 1 shopping destination, trumping all other channels with 45% of its respondents intend to shop online. And 68% of those people plan to look at items online, and then check them out in a store, with 49% planning to do the reverse.

“For retailers, the challenge and opportunity is to provide in-demand products as well as product complements and premium options. Additionally, retailers should equip their sales associates to suggest and point customers toward these complementary and premium offerings, particularly if they are only available in other store locations or through its online channel,” Deloitte noted in the report.

TECHNOLOGY, OTHER TRENDS
But despite these early promotions, Deloitte predicts retailers may have trouble luring early shoppers. In its survey, 43% plan to do the bulk of their shopping in December, a jump of 6% from 2013.

Pushing some spending away from Thanksgiving and Black Friday are the Internet and mobile devices.

“Consumers continue to change their shopping habits as well as their expectations of retailers. Shifting spending plans, shopping processes, and expectations are largely the result of improving perceptions of the economy, an onslaught of digital technology influencing consumers, more choices from a growing pool of online competitors, and fears of security breaches,” Deloitte noted in the report.

The report noted that two-thirds (67%) of respondents own a smartphone (up from 50% in 2012), and 50% own a tablet (up from 38% in 2013). Also, 72% of smartphone owners and 69% of tablet owners plan to use their gadgets to assist with holiday shopping. Of that shopping, 50% of in-store retail sales, or $345 billion, will be influenced by digital interactions this holiday season.

Following are other findings from the Deloitte survey and analysis on 2014 holiday spending.
• Just 39% of the men and 45% of the women surveyed said they had set a specific budget (or an approximate budget range) for this year’s holiday shopping.

• Consumers expect to increase their spending by 13% ($1,299 in 2014, up from $1,154 in 2013) across all categories this holiday season. While gifts continue to attract the most customer dollars, spending on home entertaining will increase by 22% year over year — more than in any other category.

• 43% of this year’s respondents said they plan to give gift cards or certificates, down from a high of 69% in 2007. The average amount respondents are planning to spend in total on gift cards is $159.

• 55% of consumers plan to shop at malls this year. However, 28% plan to shop at malls less this year compared with last season.

• Top items consumers plan to give/hope to receive
Clothing
Plan to give: 45%
Hope to receive: 32%

Gift cards/certificates
Plan to give: 43%
Hope to receive: 37%

Books
Plan to give: 31%
Hope to receive: 26%

Games/toys
Plan to give: 29%
Hope to receive: 6%

Food/liquor
Plan to give: 28%
Hope to receive: 21%

Money (cash or check)
Plan to give: 27%
Hope to receive: 35%

• Top 5 shopping venues in 2014
Internet: 45%
Discount/value department stores: 44%
Traditional department stores: 30%
Toy stores: 22%
Off-price stores: 22%

After several years of ups and downs in the national freight transportation sector, 2014 trends appear to be well in favor of the trucking industry and other shippers. Such trends also point to stable gains in the national economy. However, a possible kink in the overall good news could be shipping disruptions at West Coast ports.

The American Trucking Associations’ Truck Tonnage Index was up 0.5% in October after a a revised decline of 0.8% in September. Year-to-date, tonnage is up 3.2% compared to the same period in 2013.

The not-seasonally adjusted index, which represents the real change in tonnage hauled by the fleets, was up 4.3% compared to September.

“Tonnage made a nice comeback after declining in September. The gain fits with the increases in retail sales and factory output during October, as well as with good anecdotal reports about the fall freight season,” ATA Chief Economist Bob Costello noted in his monthly report.

According to the ATA, trucking serves as a barometer of the U.S. economy, representing 69.1% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 9.7 billion tons of freight in 2013. Motor carriers collected $681.7 billion, or 81.2% of total revenue earned by all transport modes.

With just one month complete in the fourth quarter, Costello believes tonnage levels will remain strong through the end of the year.

“The solid month-to-month gain, coupled with the acceleration in the year-over-year growth rate, is a good sign for the fourth quarter,” Costello said. “In addition, I’m expecting a solid fall freight season as holiday sales are forecasted to see the largest increase since 2011.”

PORT PROBLEMS
Putting possible downward pressure on a seamless holiday season and shipping trends are shipment disruptions caused by port disruptions in California, said Rosalyn Wilson, a supply chain expert and senior business analyst with Vienna, Va.-based Delcan Corp., who provides economic analysis for the Cass Freight Index.

The Cass Freight Index was positive in October with shipments up 3.3% year-over-year and freight expenditures up 6.4% year-over-year. Cass uses data from $22 billion in annual freight transactions to create the Index. The data comes from a Cass client base of 350 large shippers.

Wilson said the West Coast port congestion “is causing trouble for retailers attempting to stock their shelves for the season kickoff on Black Friday.”

A contract dispute between port operators and the International Longshore and Warehouse Union is resulting in “slowdowns” at key ports in California. A Nov. 18 report by the Journal of Commerce had a statement form the Pacific Maritime Association about the problem.

“The slowdowns are continuing up and down the coast. ILWU continues to withhold skilled labor at LA-Long Beach, moves are still off in the Pacific Northwest and Oakland is about 30 percent below norms on crane moves,” PMA said in the JOC report.

The previous contract between operators and the union expired July 1.

“Christmas trees are not being exported and will miss the holiday season in Asia completely. Potatoes are not being exported and the cargo will likely be a total loss for the farmers whose entire year is dependent upon current shipments. Foreign customers are already canceling orders and turning to other countries to satisfy their needs,” the Agriculture Transportation Coalition noted in the JOC report.

Wilson said the problem has reached crisis proportions with consequences unknown for the national economy.

“The best description for much of our freight transportation system is turmoil. The congestion and slowdown at the ports deteriorated over the month of October and has reached crisis proportions, particularly at the Port of LA/Long Beach, which handles more than 40 percent of all U.S. ocean imports and a disproportionately large percent of consumer goods – the very goods that are supposed to be stocking shelves for the upcoming holiday buying season. Toy retailers, in particular, have been hard hit and everyone is feeling the effect of a three-week delay now at the Port of LA/Long Beach,” Wilson explained.

She also said the ports of New York/New Jersey and in Houston also have congestion problems.

OPTIMISTIC OUTLOOKS
However, Wilson is optimistic about overall economic trends and the fourth quarter for the freight industry.

“The unemployment rate, which was 7.2 percent at this time last year, is now at 5.9 percent. Strong orders for factory goods in October, combined with increased exports, should ensure that 2014 will not end with the severe drops we have seen in the past couple of years,” she said.

In terms of financial performance for the truckload and less-than-truckload sectors, a good fourth quarter will build off what was a solid third quarter, according to Brad Delco, a transportation industry analyst for Little Rock-based Stephens Inc.

The recently reported Stephens TL (truckload) Rate Index, a measure of trucking revenue/loaded miles, increased 4.8% from the third quarter of 2013 to the third quarter of 2014. It was the 18th consecutive quarterly year-over-year increase for the publicly held companies Stephens’ tracks in the Index.

“The 3Q14 increase was the highest year-over-year increase in the index since 4Q11 driven by a number of factors, in our opinion, including driver shortages, improving demand and regulatory driven supply constraints. Going forward, we expect rate increases for the year to be up around +5.0% on average based on continued strong commentary that we have heard coming out of 3Q,” Delco noted in the report.

The Stephens LTL (less-than-truckload) Yield Index, an estimate of revenue per hundredweight (excluding fuel surcharges), was up 3% in the third quarter of 2014 compared to the same quarter of 2013. Contract rate hikes of up to 5% helped boost revenue in a sector in which capacity – the amount of equipment available to haul goods – is tight, Delco said.

Plans for the new River West Trail near downtown Fort Smith have been scaled back after bids for the project, jointly funded through a grant from the Walton Family Foundation and the city of Fort Smith, came in more than $500,000 over budget.

According to Fort Smith Deputy City Administrator Jeff Dingman, the project was originally projected to cost $1.9 million for the two-mile trail along the banks of the Arkansas River, but as he told the Central Business Improvement District commissioners Tuesday (Nov. 18) during the CBID's regular monthly meeting, the lowest bid of two submitted for the project came in at nearly $2.4 million.

In order to have the project fit the specified budget, Dingman said the city has reworked the scope of the project which initially would have the trail opening with less amenities than originally envisioned.

"Some of the revisions for the project were a reduction in the event nodes," Dingman said. "I think the project now includes the trailhead near the river events building and then there are two nodes along the trail there that are still part of the project."

Plans originally called for nine "nodes," or stations, along the River West Trail, but Dingman said the plans call for seven of those nodes to be "deferred until later on."

He said the trail plans will still feature an events location at the end of the trail as it approaches north Fort Smith, though funding and construction for the area will be delayed indefinitely.

"At the end of the trail, there will still be the trailhead at the north end won't be built yet," he said. "There will be a parking area, as such. But not the pavilion or structure we originally planned."

A bridge slated to be included along the trail has also been redesigned, Dingman said.

The city's half of the project funding, he noted, comes from the Parks and Recreation Department's share of the one cent sales tax set aside to fund capital improvement projects within the city.

The new bid date for the project is Dec. 4, with CBID Chairman Richard Griffin noting that six packets for the bid had already been picked up by potential bidders, though he said it does not necessarily mean the packets will turn into bids on the project. Once the bids are accepted and a contract is signed between the city and the winning bidder, Dingman said construction could be completed in as little as six months based on the old design featuring all amenities. Under the new scaled down plans, he said a timeline has not yet been determined though he expects a similar timeframe would be followed.

Dingman also updated CBID commissioners on the planned Compass Park splash pad that has been over budget for some months. The budget for the project, $200,000 to be split between the parks department and the CBID, has been a struggle for the city with the original cost projections for the project coming in at a cost of $258,000.

But Dingman said a meeting was taking place Tuesday afternoon between Burton Pool and Spa, engineer Bobby Aldridge and the city to discuss scaled back plans so the project can proceed with construction slated to begin as soon as a contract can be signed.

Among the changes Dingman presented to the commission was removing LED lighting that changed color and replacing the lighting structures with conventional lights. He said the LED structures could always be added at a later time. The location for the splash pad would also not include perimeter lighting in order to save money.

The splash pad, originally slated for opening last year, now appears as though it may not open until the spring or early summer of 2015 depending on how long construction takes if a contract is awarded to Burton to begin construction. But CBID Commissioner Phil White said if progress is not made soon to get construction started, he was ready to throw in the towel.

"My concern is that the ball doesn't keep getting kicked around," he said. "It was supposed to be opened last year for the kids and if it comes again to midways through the summer, I'm ready to walk away from it if it's not open. Because this is ridiculous."

Griffin said he had every reason to believe that the contract would be signed by the first of the year, adding that he would attend Tuesday's meeting with the engineer and installation company.

What initially appeared to be a setback for the U.S. Marshals Museum in Fort Smith could turn out to only be a bump in the road after the U.S. Army Corps of Engineers notified the museum that land donated for the site of the museum contains Corps easements and would require a different location of the multi-million dollar building.

According to museum President and CEO Jim Dunn, the easements — which he said were first discovered and reported to the museum's board of directors in March 2014 — are likely to push the museum further back from the banks of the Arkansas River than originally planned, but its line of sight with the Arkansas River both north and south of the planned museum location are still as envisioned by the museum's board and designers even after the Corps marked its easements along property donated by Fort Smith businessman Benny Westphal. (Westphal is an investor in The City Wire.)

And despite reports by other media, Dunn said the Corps' easements does not mean it owns any of the land in question. Instead, he said it simply gives the Corps of Engineers the ability to repair and stabilize banks of the Arkansas River should it receive damage due to flooding.

When initially notified Friday (Nov. 14) that the Corps had marked the land, Dunn said he was concerned it could impact the location of the planned museum on the 15.9 acres donated along the river.

"If you imagine a museum here, it has a view both up the river and down the river and across the river," he said. "In the location where I thought the easement line was going to be, the view of the river in some places disappeared completely which was a substantial impairment as to the aesthetics."

Dunn initially believed the staking of the easement would take place 300 feet from the banks of the river, which would have resulted in the changes with the view of the river he mentioned. But he said the staking he saw at the site Tuesday (Nov. 18) was not quite 300 feet from the bank. But he said additional work would need to be completed before he knew for sure where the building location would be allowed based on the easement lines from the Corps.

"We still are awaiting our engineer and our architects to come down and take a look at the easement so they can advise us whether or not we'll have to review the design of the building. I don't think so, but that's not my call. And see what their impression is about the aesthetics."

The engineer and architects will make a report to the museum board on possible relocation of the planned site further away from the river banks at its Dec. 9 meeting.

Tuesday's visit to the site included a constituent services representative from U.S. Sen. John Boozman's office, who has been reporting weekly updates on the museum's progress to the senator. Dunn told Boozman's office and the media that even though the location of the building may be set back further than anticipated once the final Corps of Engineers easements are officially known and documented by engineers and architects and included in the papers necessary to deed the land from Westphal to the museum, it would not prevent the museum from making use of the easement land that would still be in its ownership. The land, Dunn said, could be used for a variety of purposes outside of housing the building itself.

"Yes, we retain the ability to construct infrastructure on the easement which would include parking lots, landscaping. You know that the five tribes of Oklahoma are going to erect a monument on the ground. I'm 99% sure that will be a permitted use. (There will be a) wide range of use, but what we can't do is put a permanent structure on there that would impair the ability of the Corps to do the bank repairs if that were to happen."

Reached for comment, Boozman said he would work with the museum and the Corps to make sure any potential problems resulting from the easement were addressed soon.

“The U.S. Marshals Service played an important role in shaping Fort Smith. Citizens rightfully want to recognize that. I’ve been helping the community realize its goal of being home to the Marshals Museum and making sure we overcome any hurdles that may arise," he said. "That’s why we encouraged the U.S. Army Corps of Engineers to review its easement and are bringing interested parties to the table to table to discuss any potential issues."

Caroline Rabbitt, communications director for U.S. Sen.-Elect Tom Cotton, R-Ark., said he would join Boozman in addressing the issues in order to keep the Marshals Museum on schedule.

"Tom and his staff are aware of the situation in Fort Smith and plans to work with Senator Boozman, the Corps, and all involved parties to help find a resolution as quickly as possible," she said.

Claire Burghoff, communications director for U.S. Rep. Steve Womack, R-Rogers, said he would also be involved to resolve any issues the marked easements may pose for the museum's planned construction.

"Congressman Womack has been engaged on the issue as much as he has been able, and he will continue to foster discussion and communication between the Marshals Museum and the Army Corps of Engineers."

Dunn said he is unaware of whether the easement discovery and possible work by engineers and architects needed to relocate the planned museum building further back from the river banks would delay the opening of the museum from its possible opening date of 2017.

The planned $53 million museum's construction is a three-phase project, starting first with site work before moving to building construction and finally design and installation of exhibits to be housed at the museum celebrating the United States' oldest law enforcement agency.

The additional work tied to the easements, Dunn said, could increase the cost of the museum, though he said it is still unknown what costs if any could be associated with the resulting work from the easement discovery by the Corps.

Toys lined three city blocks around the Bentonville Square at the recent Toyland event, the most attended of all of the city’s popular First Friday outings. There were 36 toy suppliers – Wal-Mart vendors – set up under awnings to display the latest, most sought-after toys for area kids to see and test again this year.

“We estimate between 8,000 and 10,000 people visited this year’s event. It was the biggest yet in the five years we have hosted this popular outing,” said Brandi Wardlaw, event coordinator for Downtown Bentonville Inc.

She said it’s a family favorite and aside from seeing thousands of smiling kids, one local charity — Sharing for Caring came away the big winner as 80% of the toys on display were donated to them by the area suppliers. 

“The suppliers really enjoy being able to donate the display toys to a local charity. This year 4,600 children are being served by Sharing for Caring for the holiday and the area toy vendors have played a big role is making this a memorable holiday for those kids,” Wardlaw said.

While the square has been cleared of the wall-to-wall toy displays, Wardlaw said there are several activities schedule Saturday (Nov. 22) on the town square:
1 p.m.: Winter Wonderland Pageant
2 p.m.: Winter Holiday Market
4 p.m.: Live Music
6 p.m.: Lighting of the square
6:30 p.m.: Opening of Lawrence Plaza Ice Rink

REDMAN PERSPECTIVE
Mel Redman, CEO of Redman & Associates, said the event downtown each year is a win for the parents, kids and vendors.

“We used this event for directing marketing to see which toys the kids were most drawn to and how long the batteries would last,” he said.

His firm not did attend this year, but said they had taken part in the festivities since they began. Redman Industries is a toy importer for children’s ride-on toys which are made in China. Redman said despite issues with his manufacturer he does have toys for sale in Wal-Mart stores this Christmas.

Aside from the ride-on toys, Redman also secured shelf space at Wal-Mart and Walmart.com for a new child’s puzzle toy known as the Buzzle Ball. It’s akin to the Rubics Cube but was invented by Clay Judice of New Orleans.

“He contacted me to try and broker this toy into retail. He sold me the rights for a royalty on sales. I worked with Bentonville Plastics to develop the molds for the plastic toy, which is made here. We shipped to Wal-Mart Stores in August. It sells for $19.97. and we just completed an order for 12,000 of them, which were packaged and shipped form our Rogers facility,” Redman said.

REDMAN TOY ORIGIN
Redman spent 25 years with Wal-Mart Stores, helping to open the retailer’s business in Canada after the purchase of 125 Woolco Stores in 1993. He then worked as a senior vice president of operations in the West before returning to Bentonville as CEO Jack Shumaker’s assistant.

By age 44, Redman said he was ready to do something else so he retired from Wal-Mart but began consulting out of his home. For three years Redman said he worked exclusively in the Northeast as a broker for product suppliers. One of those suppliers was Rand International.

“In 2007, I was selling 6-volt ride-on toys for Rand International – the Spider Man licensing. By 2009, we took over the Rand business and Redman had seven items on the side counter day-in and day-out,” Redman said.

That’s how the retired retail veteran got into the competitive toy business.

Today, Redman is an importer of the ride-on toys which is a very competitive category. He’s a self-proclaimed small fish among the Fisher Price, Mattel and Pacific Cycle giants who each sell children’s ride-on toys. He said a sweet spot for Redman has been the affordability factor. He said the 6-volt ride-on princess toys sell for $59 at Wal-Mart which is affordable for most families, even if they need to use the retailer’s layaway option.

The bigger 12-volt versions have also been a hot item for Redman. He said these products retail under $175, compared to the $250 to $300 price tag for the major brands who often have layered on character-related licensing fees.

Redman said the toy business is a 365-day a year job, even though around 65% of the annual sales take place in the last three months of the year. His toy business is roughly 1 million pieces sold annually to various retailers,  with the majority sold to Wal-Mart.

IMPORT SCHEDULES
As an importer, Redman said he has to work with a manufacturer’s production schedule, estimating the number of toys needed for the holidays well in advance. He said the toys are made all year and shipped from Shanghai to Long Beach which is a 12- to 13-day journey overseas. 

Toys then have to pass customs and are held in storage for weekly shipments to customers. Going to coast to coast he said the timeline is another 14 days. He said to ensure toys are in stores for the holiday rush, plans are usually made one year in advance with the real build up occurring at least seven months out.

“It’s big math project to ensure the right amount of product is ordered and shipped in a timely manner so retailer shelves can be replenished,” Redman said.

That doesn’t take into account delays like the one being felt now with a shortage of drayage trucks and lack of chassis on which to move the containers, according to the Cass Freight Index report for October. Toy retailers, in particular, have been hard hit and everyone is feeling the effect of a three-week delay now at the Port of Los Angeles/Long Beach, according to the report.

ALTERNATIVE PLAN
Redman has plans to use his large facility in Rogers as a logistics operations. The facility has 26 loading docks and he said it’s being used to package and distribute loads. He said 51 loads were recently processed in one night for Redman’s own products.

But, by marrying the brokerage business with logistics capabilities, Redman believes he found an upside for growth potential to his full-time staff of 30. He expects to share more details on this alternative plan in the coming weeks as well as an update on the pending litigation with his manufacturer in China.

Redman said the toy business is a job that can done from just about anywhere in the world, but Bentonville is unique because it’s home to Wal-Mart and is logistically centered in the U.S. 

Lance Beaty, the developer who transformed the eyesore that was once Phoenix Village Mall into an area that is now home to more than 1,100 jobs, hopes he is able to perform similar magic on the iconic and historic Masonic Temple in downtown Fort Smith.

Through Temple Holdings LLC, Beaty acquired the Masonic Temple on Nov. 6. in a $2.5 million deal that includes property acquisition and redevelopment costs. Beaty Capital Group, which is owned by Beaty, financed the deal.

The iconic 3-story building located at 200 N. 11th St., was designed by architect George Mann of Little Rock in conjunction with architects J.J. Haralson and E.C. Nelson of Fort Smith. It has numerous meeting rooms and a theatre capable of seating 900. The facility was listed in early 2014 with a price of $750,000. Beaty did not disclose what he paid to acquire the building.

According to a statement from Temple Holdings, the building was proposed Jan. 28 1927, and the property was acquired in February 1927 for $49,250. Bids for construction were opened in June 1928. The contract for general construction was let to Gordon Walker of Little Rock on a bid of $208,550 on June 11, 1928. Ground was broken on June 25, 1928. The corner stone was laid Dec. 7, 1928. The temple opened for Masons on Sept. 6, 1929, and was dedicated Sept. 16, 1929.

BEATYDEVELOPMENT HISTORY
Beaty is also a managing partner with FSM Redevelopment, which purchased the 35-acre and almost abandoned Phoenix Village Mall in January 2009 After investing more than $16 million in the property, the location is now home to more than 1,100 jobs. Dr. Steve Nelson of Fort Smith is also a partner in FSM Redevelopment.

The two largest employers at the Phoenix Center are Sykes Enterprises Inc., a Tampa, Fla-based outsourcing operation employing more than 500 in their Fort Smith center, and a Shared Services Center owned and operated by Community Health Systems Inc. of Franklin, Tenn.. The shared Services Center employs approximately 600 full-time employees in an almost 90,000-square-foot portion of the property.

“I have a history of successfully redeveloping distressed or other unique assets in which traditional developers haven’t seen potential,” Beaty said in a statement. “With the E.J. Stoneman coal plant in Cassville, Wisconsin, in 1996 and with the Phoenix property here in Fort Smith in 2009, we bought something that no one else wanted and created job centers that put people to work. And we did this all with private sector money and little to no taxpayer support, I might add.”

‘TEDIOUS PROCESS’
Beaty said redevelopment plans for the Temple are not complete, but hopes to release more detail in the next few months.

“The acquisition of the temple building is the first step in a long tedious process. Plans are being developed for the property consistent with the process for historically significant properties,” Beaty said. “It’s my hope that in the next few months we’ll be able to release more details. We have some innovative options for the property, and are optimistic the public will find them exciting and that the building will once again be an active part of downtown Fort Smith.”

Beaty is the second attempt at new ownership in 2014 for the historic structure.

On June 10, Fiery Moon Global announced plans to acquire the Masonic Temple from the Western Arkansas Scottish Rite Bodies. Fiery Moon, a media and event company, said the Temple Theatre, offices and dining area should be fully restored to their original grandeur and condition within 36 months. That deal never materialized.

Jerry Seiter, a listing agent with Nunnelee Wright Commercial Properties, said in early 2014 that the replacement value for the facility was estimated at $20 million.

Turkey Day traditions run deep within family tapestries and though it’s historically a day of big family meals, football and afternoon naps, shopping in recent years has become a must-do activity by a majority of moms, according to research survey by Fayetteville-based Field Agent.

It is the season for door buster sales and retailers are aggressively wooing bargain hunters with pre-Black Friday deals on Thanksgiving Day. Field Agent said 68% of moms surveyed said shopping was a Thanksgiving activity for their family. The average household will spend $302 shopping Thanksgiving Day, including online and in-store, according to Field Agent.

While shopping is high on the list, nothing trumps family time for the 250 moms in the survey. Roughly nine out 10 respondents said time with family is their top priority this Thanksgiving Day.

It’s also a time of travel as an estimated 39 million people will need to travel this year to spend time with family.

Brianna Manning of Springdale is planning a trip to southern California to see her ailing grandfather. It’s been three years since her last visit with her family there. She is taking a week to make the drive out there because family time is important no matter what day it is.

While most employers close on Thanksgiving, more retailers, logistics and service companies are open. Niski Paredes, a homemaker in East Texas, said her husband and son are slated to work Thanksgiving Day at Georgia Pacific and Wal-Mart, respectively. Her two daughters, both healthcare professionals, are also working that day taking care of others.

“It seems like the country just rolls on by as Thanksgiving isn’t anything anymore. When I was a child it was huge to me and my family,” Paredes said.

She said her faith in God, family and pets, and counting her blessings remain her top priorities for Thanksgiving Day.

Nicky Dou of Bentonville said Thanksgiving is a day for family, food and rest, in that order. She and husband Jerry and their daughter Madison plan to spend the day close to home.

“It’s the first time in seven years that we haven’t been in Mexico over the Thanksgiving holiday. We will be spending the day at home with my parents and family this year,” Dou said.

Selena Dalrymple, a postal worker in Texas, has just one priority this Thanksgiving and that is spending time with her family.

FOOTBALL FANS
The Field Agent report reveals that watching football on Thanksgiving Day became a tradition in 1934 after the Detroit Lions played the Chicago Bears in a holiday game.

Some 80 years later there will be three NFL games aired on television and it’s week 14 of college football’s regular season. The Texas Longhorns will take on the Texas Christian University Horn Frogs in Austin at 6:30 p.m. on Thanksgiving. Texas A&M will take on LSU in College Station with a 7:30 p.m. kick-off time on Thanksgiving as well.

Field Agent found that 67% of families in the survey plan to watch football over the Thanksgiving Holiday, if not Thanksgiving Day then some other time during the weekend. Arkansas will travel to Missouri to take on the Tigers for a 2:30 p.m. kick-off on Black Friday. Seven more college games will be televised on Saturday, (Nov. 29).

SPECIAL MEAL
For many households cooking is an important part of the Thanksgiving Day. Field Agent found that that 66% of families in the survey will sit down for an evening meal with family.

The respondents expect to spend an average of $54.18 on Thanksgiving Dinner this year. American’s are expected to spend $2.4 billion in aggregate on Thanksgiving food this holiday, according to the U.S. Department of Agriculture.

About half of the respondents plan to have their special meal at lunch time and one in four said they prefer to prepare a special breakfast for the holiday which includes fried turkey. Turkey is the traditional centerpiece for holiday meal. The USDA estimates that 51 million turkeys will be consumed on Thanksgiving Day. 

OTHER TRADITIONS
Thanksgiving Day naps are also a common occurrence among 64% of households surveyed. Moms who often get up early to prepare the feast are ready for an afternoon siesta even if it’s just a short nap during the football game.

Macy’s Thanksgiving Day Parade is also a popular attraction for families. It began in 1924 and is aired each year for millions on top of the 3.5 million New Yorkers who will watch the parade live in the heart of Manhattan. 

Field Agent found that 54% of moms surveyed say they will watch the event with their children this year – some in person and but most tuning into the television broadcast.

Decking the halls for Christmas is also a family tradition for 45% of the those surveyed. Another 37% said they plan to spend time outdoors, weather permitting. Volunteering is an important tradition for 4% of those surveyed. Field Agent said a few busy moms make it a point to have their families volunteer to serve food at local shelters or deliver meals to shut-ins.

CEO Donnie Smith said Tyson Foods “2.0” is at the beginning of a new growth phase with the integration of Hillshire Brands it acquired earlier this year at a cost of around $8.5 billion.

“We have the right brands and the products people most want. This is a very exciting time to be a leading food company in the world,” Smith said Wednesday (Nov. 19) at the Morgan Stanley Global Consumer & Retail Conference in New York City.

Tyson Foods just completed a record fiscal year. Fiscal year revenue of $37.58 billion was well ahead of the $34.374 billion in the previous fiscal year, with annual income of $864 million, up 11.05% over the 2013 fiscal year. Fourth quarter revenue was $10.105 billion, up 13.6% compared to the previous fourth quarter. Income in the quarter was $469 million, up over the $416 million in the 2013 period.

On Wednesday the company gave a fiscal 2015 earnings guidance range between $3.30 to $3.40 per share, which would be a 12% net gain year over year. Smith said the company has worked hard to build credibility with investors in recent years. He said market volatility is less of a financial threat because the company found ways to insulate itself from wide swings in commodity prices.

Smith said the major operational improvements in the chicken segment and the use of a “buy versus growth” strategy has helped the company grow the majority of the birds it needs, but also buy the breast meat parts in the open market. The parts are then pushed through value-added processes to raise their wholesale margin and retail price points. 

Breast meat is the higher margin item and most favored in food service and retail, but it’s only half of the bird. The dark half often ends up in cold storage or sold for pennies per pound. Tyson’s solution is to purchase the parts it needs to fill certain orders and then make sure it can mark up the commodity price by trimming, seasoning and/or cooking the product for its customer. 

Smith said this has been a winning proposition for the company and helped to ensure it doesn’t overproduce the amount of chicken it needs to fill orders. He said the beef and pork operations at Tyson Foods are each a spread business as they procure the raw materials — cows and hogs — and they process them for added value. They have applied that same approach in the chicken segment to some degree. 

Tyson Foods has impressive depth and breadth in the products it makes. About 1 out of every 5 pounds of chicken, beef and pork processed in the U.S. comes from Tyson Foods, the company said.

The marriage with Hillshire Brands gives Tyson Foods the No. 1 market share in 11 leading categories. Tyson already has the No. 1 market share in fresh chicken, frozen chicken, frozen uncooked chicken and stack pack bacon. Hillshire Brands owns the breakfast sausage and frozen protein breakfast categories with Jimmy Dean. Hillshire smoked sausage, Ball Park franks, State Fair corn dogs and Aidells specialty sausage each also have a No. 1 market share in their respective categories.

Smith said having a No. 1 share is great, but doing it in key categories that are exploding in growth is far better. For instance, Tyson Foods commands 12% of the fresh chicken market that is growing at 6.5% annually, and which the company has 85% household penetration.

He said in breakfast sausage Jimmy Dean commands 20% of the market which has a 69% penetration level. This category is growing at 5.7% annually. The same is true for frozen protein breakfasts growing at 7% annually.

Smith said being No. 1 in the categories that are growing the fastest gives Tyson Foods plenty of upside in fiscal 2015. He said the $225 million in synergies the company has identified for fiscal 2015 are another added layer of insulation to support higher profits.

When asked about the 3% he expects chicken production to increase in 2015, Smith said it will take that much to fill the protein hole left by the shrinking beef production.

“Beef demand is still strong, but the price has gotten so high that consumers have started reaching for chicken in the meat case. We have been talking about this for two years but it’s just now happening. Millennials also index higher for chicken. These two dynamics are going to be with us for some time in the future,” he said.

Smith doesn’t expect to see beef supplies increase over the 2014 levels until 2020 given the length of time it takes to regrow a herd. Until then, Smith said consumers will eat more chicken, because it’s more affordable than beef or even pork.

Shares of Tyson Foods (NYSE: TSN) closed Wednesday at $43.18, up 53 cents. During the past 52 weeks the share price has ranged from a $44.24 high to a $30.75 low.

The city of Van Buren has continued a long tradition of providing $100 annual bonuses to its employees, even as the city's budget could be impacted by a rise in healthcare costs next year.

According to Mayor Bob Freeman, 132 employees will receive $100 bonuses just as the city has done for the last 30 years. The funding for this year's bonus was included in the fiscal year 2014 budget.

As for whether the tradition will continue at the same rate it has since 1984, he said it was too early to tell.

"Like I said, it was in the budget and we'll examine for next year also," he said, adding that an increase to the city's health insurance premium of $133,000 has to be considered when looking at the overall budget situation for fiscal year 2015.

The rise in health insurance rates coupled with only a modest increase in sales tax revenues of $120,000 for the year means that Freeman could bring up a discussion he had in May when news of the health insurance hikes were first brought to the city council. At that time, Freeman said it could be time to explore city employees possibly taking on some of the cost associated with insuring dependents and spouses. The city now funds all premiums for those on city health insurance.

"In May, I talked about moving forward, the employees need to pick up (the tab) for the family portion," he said. "The council put it off to see what would happen with any further increases."

Premium increases, he said, would not be happening again for the time being, but the increase earlier in the year had put a dent in the city's finances.

"But we need to examine it and that's something we need to talk about," he said of the idea of family insurance premiums not being paid in full by the city.

Freeman, whose FY2014 budget was set at $12.078 million and included a cost of living adjustment (COLA) of 1.5% for all city employees, said a final determination on pay raises for the 2015 budget year had not yet been determined.

"At this point, I don't know (what we'll do about raises). I want to talk to the city council and give them a couple of different options," he said.

While the 2014 COLA was 1.5%, he said 2013 was a 2% COLA.

"But there are some years we've not given anything," he said, pointing to 2011 and 2012.

The pay raises the last two budget years have been tied, he said, to the cost of living raises given to Social Security recipients.

It is known at this point if the COLA would apply to all city employees, included elected, or if the pay raises would exclude city staff.

A separate ordinance passed unanimously by the council last year raised the salaries of three elected officials – the mayor, the city clerk-treasurer and the city attorney. The mayor and clerk-treasurer's salaries were raised by 1.5%, while the city attorney's annual salary was raised by $500, or 4.17%.

According to the ordinance, the salaries for each position were set as follows:
• Mayor - $63,489.71 annually;
• City Clerk-Treasurer - $46,971.68 annually;
• City Attorney - $12,500 annually; and
• District Court Judge - $27,551.90 annually (the city's pays a portion of the judge's total salary).

Freeman said at the time the ordinance was similar to other years, giving city officials the same pay raises on a percentage basis that city employees receive.

"Whatever the cost of living raise was last year, we did the same thing," he said. "If there's no cost of living raise (for city employees), there's no cost of living raise for elected officials."

Crawford County's general fund budget deficit for fiscal year 2015 has narrowed by more than $100,000, but the quorum court still has to find a way to cut $229,000 from its budget within the next 30 days. County Judge John Hall said the court will meet Thursday night (Nov. 20) to discuss further cuts to the budget, but he is not sure where else there could be cuts.

Requests for expenditures by all county departments totaled $7.226 million at the start of the budget cycle, but County Treasurer Beverly Pyle said the county only has anticipated revenues of $6.817 million.

In order to meet the tight budget constraints, Hall said the court will look at every possible solution to the funding gap before layoffs become a solution to the funding problem.

"The need to take at look at what is least offensive to people in the system (county employees)," he said. "To start cutting positions is pretty hard. If there are other ways, everyone would be a whole lot happier. But I don't know what they're going to do."

The largest portion of the budget, 64.3%, goes to fund the sheriff's department and other law enforcement obligations. Requests by Sheriff Ron Brown in the 2015 budget include $2.263 million for the sheriff's department and $2.121 million for the county jail for a collective request of $4.384 million.

And according to Brown, his requests were reduced to help the county balance its budget this year, in spite of the fact that the majority of his requests include salaries. The personnel requests from his budget requests total $2.719 million. An additional $240,285 to hire six new jailers, he said, come from a portion of the quarter cent sales tax passed earlier this year to fund law enforcement operations.

"I made $140,000 (in cuts) at the last meeting. What I basically did was cut the operations out of the general fund and just used the remaining balances of the automation funds and the Act 209 money and the sheriff's communications fund and that just leave salaries coming out of that (general fund)," he said.

According to county officials speaking on background, there has been discussion of asking Brown to operate a larger part of his budget from the quarter cent sales tax since the new county jail the funds are meant to operate has not yet been constructed. But asked whether it was something he was willing to entertain to cut costs in the general fund, he said it would not solve the long term general fund issues which have cropped up in several of the last few years.

"My only concern with that is I budgeted when we started planning for this 270 bed jail and I budgeted $2.8 million," Brown said. "I get $1.4 million for the jail now. That quarter cent at the lowest (is projected to) produce about $1.5 million per year. It can grow as the economy grows. … If you take the $1.5 million and the $1.4 million, that's $2.9 million. My concern is if they start using this quarter cent on long term budget items such as salaries, when we open the new jail is there going to be money to operate the 270 bed facility?"

He equated it to have savings set aside for a family vacation, but dipping into the savings before taking the vacation.

"You dip into it for a washer and dryer, this or that with the mindset that we'll make it back. But in three years, you can't go to Disney," he said.

Hall said additional options are limited, noting that his office accounts for about 11% of the general fund budget and includes basics that literally keep the lights on, such as the electric bill and other items including property insurance for buildings.

He said 5% of the budget goes to the circuit clerk and 7% to the county clerk.

"When you get right down to it, there's not a lot of areas (to cut from)," Hall said, though he said one possibly he would float during Thursday's budget meeting is possibly cutting from the election commission which originally requested $137,000 for next year, including $72,000 in salaries, $34,000 in supplies and $31,100 for "total other services." The election commission had a total 2014 budget from the general fund of $184,200 which included a general election, something the county will not have next year.

"Is that something they can get by without?" Hall asked rhetorically. "That's half your deficit right there."

He said another option includes reviewing the level of anticipated revenues to determine if estimates from Pyles' office are too conservative and could be raised.

Regardless of what decisions must be made to balance the budget, one thing is certain — Hall said a tax increase is still "off the table." But instead of a guarantee of a veto by Hall if the court were to pass a millage increase, he said time has now made that decision.

"You have to do it (by) November, so it's totally off the table."

The Crawford County Quorum Court Budget Committee will meet Thursday at 6 p.m. at the Crawford County Circuit Courtroom #2, 220 South 4th Street in Van Buren.

Supporters of Arkansas’ anti-gay marriage amendment rallied at the Capitol Wednesday, the day before the Arkansas Supreme Court and a U.S. district judge were to hear oral arguments on Judge Chris Piazza’s ruling that struck it down.

Several hundred Arkansans attended the “Honor Our Vote” rally, sponsored by Vision America, the Family Council and others on a cold, windy day. A couple of dozen vocal gay marriage supporters heckled the speakers throughout the proceedings.

Arkansans passed a constitutional amendment defining marriage as a union of an opposite-sex couple in 2004 by a 75-25% margin. Speakers called on the Court to affirm that ruling.

“We are here today to call on the Arkansas Supreme Court to simply let the people’s vote for marriage stand,” Jerry Cox, executive director of the Family Council, said to cheers from his supporters.

Oral arguments on the ban will be held in the Supreme Court and in U.S. District Judge Kristine Baker’s court Thursday. Cox said the rally was focused on the Supreme Court because justices are elected.

Gay marriage supporters made their presence known throughout the event by attempting to refute the speakers’ comments from the audience. When pastors were asked to stand on the Capitol steps behind the speakers, pastor Randy Eddy-McCain and associate pastor Sheryl Myers of Open Door Community Church in Sherwood joined the group holding a sign reading, “Christian pastors for marriage equality.”

Organizers allowed them to remain on the steps while gay marriage opponents stood in front of the sign with signs of their own.

“They asked for pastors to come, and we knew there’d be a lot on the other side, so we wanted to let people know that we as Christian pastors believe in equality in marriage,” Eddy-McCain said in an interview afterwards.

Asked about the counter-demonstration, Cox said, “Oh, it’s a free country, and people are free to come out and voice their opinion as much as they want. I have no problem with that. I’m just glad we have the right to speak our mind, and I support everyone else’s right to do that as well.”

Josh Duggar, executive director of the D.C.-based group Family Research Council Action and a star of the TLC television series “19 Kids and Counting,” told audience members the country’s economy is built on strong families, strong faith and an understanding of basic principles.

“I truly believe that this is under attack not coincidentally, but there is definitely an agenda,” he said. “There is an agenda to silence us, to silence those of us who believe in what is right, those of us who have these deeply held convictions.”

He read a supportive letter from Gov.-elect Asa Hutchinson, who said traditional marriage benefits society. Hutchinson’s letter said opposition to gay marriage is not intended to encourage discrimination.

“As governor, I will continue to protect traditional marriage. In the event the Arkansas Supreme Court allows same-sex marriage in Arkansas, I will work with pastors, community leaders and others to ensure that we protect our rights of conscience for our churches, businesses and nonprofits,” Hutchinson’s letter said.