America’s Car-Mart is beginning to reap the rewards of its disciplined business model. The company posted net profits of $7.519 million in its second quarter of fiscal 2015. Net income rose 29.5% from the same period last year. On a per-share basis earnings were 83 cents, blowing past the 66 cents forecast by analysts and the 61 cents profited a year ago.

Top line revenue for the quarter ended Oct. 31 was $133.83 million, a gain of 10.2% over the $121.42 million in sales recorded a year ago. Analysts expected revenue of $120 million, a decline of 0.7%.

For the first half of fiscal 2015 Car-Mart had earnings of $14.75 million, versus $13.32 million last year. Revenue totaled $261.21 million, up 7% from the $243.97 million recorded in the same period last year.

"We are pleased with the results for the quarter especially the improvements with our sales productivity. By focusing on affordability and offering a good mix of vehicles at all price points, we were able to increase the average retail units sold per store per month to 29.6 from 27.6 for the prior year quarter,” CEO Hank Henderson said in the earnings report released Wednesday (Nov. 19) after the markets closed. “Offering a solid assortment including lower priced vehicles allows our transactions to be more affordable for our customers, which we hope will increase success rates into the future. Our general managers continue to raise the bar in the field and their efforts are to be commended.”

Henderson said the competitive landscape continues to be challenging. Car-Mart finished the quarter with 136 dealerships, an increase of 7 from this time last year.

“We have opened two new dealerships so far in fiscal 2015, and we continue to expect to open a total of 8 for the current fiscal year and then return back to a more historical store opening rate for 2016 and beyond,” Henderson said.

The company reported top line growth of 13.9% in unit sales with 12,084 vehicles sold in the quarter. The average sales price declined 3% from a year ago to $9,477, but the number of sales per lot improved overall for the first time in three quarters.

”We remain convinced that we are moving the company in the right direction, and we are excited about our future,” Henderson noted in the release.

J.R. Bizzell, an analyst with Stephens Inc., underestimated Car-Mart’s fiscal second quarter earnings, but said there is solid store growth coming in the back half of 2015 and in fiscal 2015. Bizzell cited competitive pressures in the subprime auto finance market for his tempered expectations in the recent quarter. Bizzell has the stock rated equal-weight, or a hold position with a target price of $45.50. (Stephens Inc. has received compensation for products or services other than investment banking services from America's Car-Mart, Inc. in the past 12 months.)

“Although we wait for further confirmation before becoming more constructive on the stock, we will continue to monitor shifts in the competitive landscape, as we believe Car-mart’s business model has the company well positioned to take advantage of favorable market dynamics,” Bizzell noted to investors.

C.L. King, an analyst with Bill Armstrong, also underestimated Car-Mart’s earnings potential in the recent quarter. But unlike Bizzell, he recently reiterated a “buy” position on the stock.

“We think credit availability for subprime auto buyers may begin tightening up in the months ahead as industry-wide loss rates continue to increase. At the same time, Car-Mart appears to be more effectively adapting to the still-difficult competitive environment, as evidenced by its improved recent performance,” Armstrong said. “To the extent that overall credit availability for subprime auto buyers does in fact begin tightening, it would be a clear positive for the company as it would represent a reduction in competitive pressure and would drive more traffic to its stores. Car-Mart holds its own paper and does not rely on securitizations. We remind investors that during the credit crisis Car-Mart experienced very strong sales and earnings increases.”

He has a target price of $47.99 on the stock.

Charge-offs are another metric that can weigh on Car-Mart profits. Despite the higher profits in the quarter, Car-Mart’s charge-offs rose to 7% of receivables in the quarter, up from 6.9% a year ago.

“We have been working hard to ensure we focus on balancing the benefits of volume increases with credit quality risks, and we are generally pleased with deal structures for the quarter. Charge-offs continue to be higher than we would like, which is an indication of a continuing tough operating environment, although we feel like we are getting better with our blocking and tackling in the key areas of the business," said Jeff Williams, chief financial officer of America's Car-Mart.

Analysts commend Car-Mart for its strong balance sheet. Bizzell said Car-Mart’s strong cash flow generation has allowed for the company to fund its growth without the need to add on excessive debt.

"Our balance sheet remains very conservative with a debt to equity ratio was 48.4% and a debt to finance receivables ratio of 25.9% at the end of the quarter. We believe in the long-term value of the company,” William added.

He said the company’s first priority for capital allocation will be to support the healthy growth of the business.

"We are dedicated to adhering to the thirty-three year Car-Mart tradition of ‘watching every dime’ and being the lowest cost provider on both the financing side of the business and the dealership side," Williams said.

Shares of Bentonville-based America’s Car-Mart (NASDAQ: CRMT) closed Wednesday at $44, down 50 cents. For the past 52-weeks the share price has ranged from $34.56 to a recent high of $48.93.

Of the eight metro areas in or connected to Arkansas, five had per capita personal income growth and three posted declines in 2013 compared to 2012. Only three Arkansas counties – Pulaski, Union and Arkansas –  in 2013 had per capita personal income above the national average of $44,765.

The figures, released Thursday (Nov. 20) by the U.S. Bureau of Economic Analysis, show that none of Arkansas’ metro areas posted per capita personal income above the national average. The state average was $36,698, just slightly above the $36,423 in 2012, and up above the $34,098 in 2011. The federal report provides the most recent data for U.S. per capita personal income changes in the U.S.

Following are the previous three years of per capita personal income in Arkansas and the U.S.
Arkansas
2013: $36,698 (0.75%)
2012: $36,423
2011: $34,089

United States
2013: $44,765 (1.27%)
2012: $44,200
2011: $42,332

The Missouri per capita personal income in 2013 was $40,663, up 1.75% over 2012. Oklahoma’s per capita personal income in 2013 was $41,861, up 1.11% compared to 2012.

Connecticut had the highest per capita personal income in 2013 with $60,658, and Mississippi had the lowest with $33,913.

ARKANSAS MOVES
Arkansas metro areas posting a decline in per capita personal income between 2012 and 2013 were Jonesboro (-0.44%), Little Rock-North Little Rock-Conway (-0.51%), and Texarkana (-1.14%).

The Arkansas metro areas posting gains were Northwest Arkansas (2.37%), Memphis-West Memphis (0.87%), Pine Bluff (0.42%), Fort Smith (0.25%), and Hot Springs (0.05%).

While it may not be a surprise that the booming Northwest Arkansas economy had the biggest per capita personal income gain in 2013, most of the Arkansas counties with the highest per capita personal income are in the central, south and eastern parts of the state.

Top 10 Arkansas Counties (per capita personal income - 2013)
Pulaski: $47,854
Union: $47,139
Arkansas: $46,240
Saline: $41,159
Benton: $41,157
Sebastian: $40,934
Garland: $38,526
Cleburne: $37,809
Desha: $37,024
Cross: $36,786
Ashley: $36,634

No Arkansas metro areas had per capita personal income above the national average and only four (Northwest Arkansas, Hot Springs, Little Rock-North Little Rock-Conway, Memphis-West Memphis) had personal income above the state average of $36,698.

ARKANSAS METRO DATA (First number in parenthesis is the rank among the 381 U.S. metro areas, and the second number is the rank in terms of percentage growth among the 381 areas between 2012 and 2013.)
Northwest Arkansas (225, 57)
2013: $37,863 (2.37% growth between 2013 and 2012))
2012: $36,985
2011: $34,430

Fort Smith metro (310, 328)
2013: $34,711 (0.25%)
2012: $34,622
2011: $32,791

Hot Springs (208, 342)
2013: $38,526 (0.05%)
2012: $38,506
2011: $35,497

Jonesboro (303, 364)
2013: $35,014 (-1.14%)
2012: $35,169
2011: $32,999

Little Rock-North Little Rock-Conway (114, 365)
2013: $42,753 (-0.51%
2012: $42,976
2011: $40,301

Memphis-West Memphis (158, 263)
2013: $40,987 (0.87%)
2012: $40,630
2011: $38,552

Pine Bluff (335, 313)
2013: $33,494 (0.42%)
2012: $33,353
2011: $31,065

Texarkana (304, 373)
2013: $34,990 (-1.14%)
2012: $35,394
2011: $34,126

NATIONAL DATA
According to the BEA report, personal income grew in 2013 in 2,695 counties, fell in 390, and was unchanged in 28. On average, personal income rose 2% in 2013 in the metropolitan portion of the United States and rose 2.1% in the nonmetropolitan portion. The metropolitan and nonmetropolitan portions grew 5.3% and 4.4%, respectively, in 2012.

Per capita personal income for 2013 ranged from $17,536 in Telfair County, Ga., to $121,632 in New York County, N.Y.

Personal income, as defined by the BEA, is the income received by, or on behalf of, all persons from all sources: from participation as laborers in production, from owning a home or business, from the ownership of financial assets, and from government and business in the form of transfer receipts. It includes income from domestic sources as well as from the rest of the world.

Whirlpool claimed in a Nov. 17 letter to Fort Smith City Administrator that levels of toxic potentially cancer causing trichloroethylene (TCE) hasv been reduced by as much as 80% in some areas impacted by the plume.

In making the claim that TCE concentrations have been reduced by as much as 80% following chemical oxidation treatments, Whirlpool Vice President Jeff Noel told Gosack the drop is representative of all but two areas of the plume.

"Natural attenuation of TCE is also occurring in both onsite and offsite groundwater," Noel said. "The success of the second oxidant injection effort is anticipated to be further evident after receipt and assessment of the 4th Quarter groundwater monitoring data."

The information was included in the company's 2014 third quarter progress report and comes just months after a Sept. 29 memo from the Arkansas Department of Environmental Quality that indicated the TCE plume was spreading. Whirlpool disputed the finding late last month.

Noel said data continues to support Whirlpool's assertions that the TCE plume is not growing but in some cases decreasing, as noted above.

"Data from both the south plume beneath the Whirlpool property and the north plume extending past Ingersoll Avenue indicate that both plumes were stable to decreasing, though the expected seasonal variability of plume boundaries was evident at select locations."

He said the total amount of TCE pollution could be limited to just a few gallons of the chemical in the groundwater below the Whirlpool plant and homes in the area.

"To supplement the tools for measuring the impact of our remediation efforts, an analysis of the third quarter groundwater data was conducted to provide an estimate of the amount of TCE in the groundwater," he wrote. "This analysis determined that the total quantity of the TCE distributed throughout the north groundwater plume is between less than 1 gallon and a maximum of 2 gallons, and between 2 gallons and a maximum of 8 gallons are present in the south plume beneath the Whirlpool property. These conservative estimates provide further confirmation that TCE in the groundwater is limited and contained."

According to Noel, an investigation was initiated by the company to determine any movement of the plume, adding that the results found "no TCE impacts are migrating beyond the property boundaries, except at the locations previously investigated at the northwest and northeast corners of the former manufacturing building property."

Any risks from vapor containing TCE as well as groundwater are below ADEQ-set limits, he added, adding that there are no changes to health risks. To deal with a discovery of additional TCE near the northwest corner of the Whirlpool site, ADEQ did recommend soil removal, which Whirlpool has fought vigorously, having only removed about 300 cubic yards of soil.

Environmental consultant Michael Ellis, a principal at ENVIRON – Whirlpool's agent in dealing with the pollution problem caused by the use of a degreasing agent until the 1980s at its now-shuttered facility – said removing additional soil would be pointless and would create "significant additional complications that would negatively affect the progress of onsite and offsite remediation, as well as the redevelopment of the overall site."

Ellis also noted that remediation plan calls for "capping" the site, which would mean a concrete or asphalt layer would be placed on the soil to prevent digging and any soil vapor rising from the contaminated site. The plan calls for the capping in addition to chemical oxidation treatments.

"The selected management method of onsite impacted soils under the RADD (remediation plan) is capping and containment, not removal of soil below the RAL. This method was chosen precisely because soil removal would neither reduce the risk of exposure to onsite workers or area residents not would it materially impact the offsite groundwater contamination."

Ellis also said soil removal above what has already been completed would present "several engineering and operational setbacks."

"Substantial additional soil removal would threaten the structural integrity of the former manufacturing building and stability of the electrical substation," he said. "It would also require de-watering operations. These issues would likely complicate and delay completion of the remediation activities required under the RADD and the ongoing redevelopment of the property."

The quarterly update provided on Nov. 17 was requested by the Fort Smith Board of Directors in addition to reporting required by the ADEQ.

A May 1 vote against unionizing at the Fort Smith-based OK Foods processing facility in Heavener, Okla., has been thrown out by the National Labor Relations Board after it had accused the company of interfering with the vote. A company official rejected the interference allegation.

The accusations from the NLRB came in a letter from the agency's Amy Novara, a field examiner, who detailed a list of nearly 20 different accusations against the company and individuals from on-site supervisors to CEO Trent Goins.

Novara said the company attempted to use financial incentives to influence the May 1 vote on whether employees should join the United Food and Commercial Workers Union Local 1000, a vote that ultimately failed. She also said after March 20, OK Foods denied wage increases and retroactive pay to employees who engaged in union activities.

Novara's letter continued, alleging the company threatened employees if they voted in favor of unionizing with the United Food and Commercial Workers Union Local 1000 during the May 1 vote.

"In or about February 2014, the Employer ... informed employees that they could not address wage increases and retroactive pay because of the Union and threatened employees with loss of wages if employees selected the union as their collective bargaining representative, in violation of Section 8(a)(1) of the Act," she wrote.

In his ruling handed down Nov. 13, NLRB Hearing Officer Michael Werner agreed with Novara's claims of interference by the company in the union vote.

"Consistent with my findings above, I find that there is sufficient evidence that the Employer interfered with employee free choice by promising employees a wage increase if they rejected the Petitioner, by telling an employee that it could not resolve his wage complaint because of employees' union activity, and by soliciting and promising to remedy employees' complaints."

As part of the interference, Werner said OK Foods President and CEO Trent Goins engaged with employees about grievances the staff of the facility had, which included 90-day wage increases and the lack of a nurse on certain shifts. Goins, Werner said, resolved some of the issues raised by staff during the lead up to the vote.

"That Goins did not notify employees if or how or if the Employer resolved each complaint carries little significance," Werner wrote in his ruling. "Regardless of whether an employer specifically tells employees that he has resolved their complaints, they are bound to recognize their employer's newfound willingness to listen to their concerns and infer that the employer is willing to remedy their grievances if they reject the union."

Werner recommended setting aside the May 1 election and holding another vote for the employees of the Heavener facility.

Goins defended himself from the allegations made following the vote and Werner's findings in a statement to The City Wire Thursday (Nov. 20).

"Despite the fact that the National Labor and Relations Board's hearing officer overruled all of the specific objections made against OK Foods by the union, and even held that the company didn't threaten, coerce or intimidate anyone, the officer still believed a new election is warranted. Only when you are up against a labor union board can a company win all the objections yet still have to have another election simply because the outcome didn't go the union's way.

"While we are disappointed with the subjective decision by the National Labor and Relations Board's hearing officer, we will continue to stand with and support our maintenance and refrigeration employees in Heavener, Oklahoma, who voted against the union and against organizing this past May. While this decision is a setback for our employees, we fully expect them to once again unite and vote against the union."

For its part, the UFCW Local 1000, which originally filed the objection to the May 1 vote's results, said it was pleased with Werner's decision to recommend another election.

“I’m pleased the Board did the right thing for these workers,” said UFCW Local 1000 President Ricky Burris. "The Board ruled definitively that OK Foods interfered with these employees’ free choice in organizing a union. Why is this company so scared of its workers having a fair vote without lies and coercion? I want to see a re-vote scheduled as soon as possible.”

No date has been set for a new election.

President Barack Obama used a primetime White House speech to tell a national audience of changes he plans to make to the U.S. immigration system.

Obama, who is frustrated by Congressional inaction on the subject, said the time had come to implement new rules to handle illegal immigration.

“For more than 200 years, our tradition of welcoming immigrants from around the world has given us a tremendous advantage over other nations. It’s kept us youthful, dynamic, and entrepreneurial. It has shaped our character as a people with limitless possibilities – people not trapped by our past, but able to remake ourselves as we choose,” said Obama. “But today, our immigration system is broken, and everybody knows it.”

The main changes include:
• The Department of Homeland Security’s Immigration and Customs Enforcement (ICE) division will shift priorities to encourage law enforcement officials to focus on illegal immigrants with criminal convictions and recent illegal arrivals to the U.S.

• Illegal immigrants who have lived in the U.S. for five years or more with children born in the states can register with the government, pass a criminal background check, and pay taxes. This program is expected to impact nearly 4 million illegal immigrants.

• Also, foreign students studying in the fields of science and technology in the U.S. will have expanded visa opportunities. Also, entrepreneurs can come to the U.S. if they can demonstrate they have investors and will create domestic jobs.

The President also said the plan “will build on our progress at the border with additional resources for our law enforcement personnel.”

President Obama also countered criticism that the U.S. border with Mexico is unsecure and is making the immigration problem more difficult.

“Today, we have more agents and technology deployed to secure our southern border than at any time in our history. And over the past six years, illegal border crossings have been cut by more than half. Although this summer, there was a brief spike in unaccompanied children being apprehended at our border, the number of such children is now actually lower than it’s been in nearly two years. Overall, the number of people trying to cross our border illegally is at its lowest level since the 1970s. Those are the facts,” he said in a statement.

The timetable for implementation of the immigration order could take some time. Several aspects of the President’s action won’t go into effect until next spring, while some could take 18 months or more to work through the rule making process.Republican leaders in Congress have argued that Obama’s plan is a usurpation of power. LInk here for more details from the White House.

U.S. House Speaker and Republican John Boehner issued this statement: “By ignoring the will of the American people, President Obama has cemented his legacy of lawlessness and squandered what little credibility he had left,” House Speaker John A. Boehner said in a statement after the speech. “Republicans are left with the serious responsibility of upholding our oath of office. We will not shrink from this duty, because our allegiance lies with the American people. We will listen to them, work with our members, and protect the Constitution.”

Obama’s plan was not well received by members of Arkansas’ Congressional Delegation.

The office of U.S. Sen. John Boozman, R-Ark., issued this statement: “Arkansans should be upset as well as all Americans. This is clearly an overreach of the office. The President is called ‘Mr. President,’ not ‘Your Highness.’ He simply doesn’t have the authority to do this. Congress needs to take all the tools we have in the toolbox to really push back.”

U.S. Rep. Steve Womack, R-Rogers, said Obama’s move is not how the Democratic process is supposed to work.

“The Constitution is clear when it grants Congress the authority to make our nation’s laws, not the President.  But throughout his presidency, President Obama has refused to do the job actually afforded to him by the Constitution, the job of enforcing – not creating – America’s laws. This has been especially true when it comes to immigration, and I’m astounded that tonight he’s proposed to make our immigration laws even more lax through executive fiat and skirt Congress yet again,” Womack noted in his statement. “There is no doubt our immigration system is in desperate need of reform, but President Obama’s plan does not make the reforms we need. Instead, Congress must develop a long-term immigration policy that encourages lawful behavior. As we work towards these thoughtful solutions, Obama cannot change the laws himself. That’s ‘not how democracy works.’

NanoMech is a dream come true for Dr. Ajay Malshe said he shared his dreams for what would become NanoMech 12 years ago with his wife. They packed their bags, left India, and came to the U.S. where seemingly all things are possible.

The Springdale-based nanotechnology manufacturer celebrated the opening of its global headquarters on Friday (Nov. 21). Attending was Gov. Mike Beebe, an early supporter of the technology that can’t be seen by the naked eye. A U.S. Department of Energy assistant secretary as well as investors, customers and advocates of NanoMech also were on hand for the celebration.

Nanotechnology is a research field that manipulates matter in a microscopic way allowing for applications. The scale of nanotechnology is so small — a billionth of a meter — or the equivalent of one ten-thousandth the size of a human hair. Applications may include hardening of tools so they last much longer, suspension in lubricants that improve performance up to 40%, and use in sprays to enhance protection from bacteria and other microorganisms.

“NanoMech in one sense is a gigantic experiment. It’s not about getting to a destination it’s about the discoveries along the journey. For me ‘Made in America’ is not about the likes of Google and Facebook, it’s about making high quality products, applying ingenuity and creating economies of scale with high quality jobs,” Malshe, the company founder said. “Today is an important milestone for NanoMech, proof that what you can dream, can also become reality.”

The company recently completed a 29,000-square-foot addition to its facility that triples the capacity for the high tech manufacturer. The company will employ 37 engineers by year-end, nearly all who are University of Arkansas graduates.

“The world runs on machines and machines run on lubricants. Now, many of the world's machines will depend on NanoMech’s inventions and products well into the future,” CEO Jim Phillips said.

Beebe, who served as the keynote speaker, expressed a sense of urgency about what NanoMech is doing.

“This is tomorrow and we have a headstart. Make no mistake, China is on our heels spending more money than Washington can print,” he joked. 

Beebe said with new technologies changing at warp speed, he said NanoMech engineers may not yet envision discoveries and work will complete in the next three months. He urged the investors in the room to continue their support of NanoMech, which is just starting to scratch the surface of its potential. Beebe said the products coming from NanoMech are starting  to revolutionize the world of manufacturing. Like the nano lubricant that reduces friction and wear with industrial equipment as well as creating better fuel efficiencies in light and heavy duty vehicles.

“NanoMech is an Arkansas economic development success story,” said Beebe, who is winding down his eight years as governor. “Four years ago I cut the ribbon on what was mostly an empty building filled with promise. Today, the promise has been fulfilled and NanoMech has grown to be a leader worldwide in material science with incredible nanoscale innovations.”

The state announced Friday an investment of $600,000 in NanoMech. Grant Tennille, executive director of the Arkansas Economic Development Commission, told the crowd that together with the Arkansas Development Finance Authority (ADFA) the public/private partnership between the state and NanoMech has been a success.

“This has been some of the most fun stuff to work on. We have never had a whole lot of tools aimed at startups, particularly startups like NanoMech, that went from launch to scale almost immediately,” Tennille said. “There was demand for the product before any of the equipment was purchased to make the product so we felt like if NanoMech could get up and running then it could be able to take care of itself and it has.”

NanoMech has raised almost $15 million, with a little bit of help from the state. Tennille said the $600,000 in new grant funding brings the state’s equity investment in NanoMech to $1.1 million in addition to other incentives made early several years ago.  Through ADFA, Tennille said they structured the new $600,000 grant and the former $500,000 made two years ago as equity purchases.

“These two deals give us an equity stake of 5% in NanoMech’s last capital fundraising round,” Tennille said. “We think there is potential for the state to exit with capital recapture at some point and still have equity growing in this business longer term.”

He said it’s the AEDC and ADFA goal to use the equity investments to help establish a revolving capital pool that can provide startup funds to other businesses.

Springdale Mayor Doug Sprouse said NanoMech’s reputation is growing within and outside the city.

“I continue to be blown away by the potential this growing company holds. It’s likely the best kept secret in the Springdale, but I am here to tell you that’s going to change,” Sprouse said.

John Bartos, vice president of technology and development at Houston-based Cameron International, said he stumbled across Dr. Malshe a decade ago when he worked at a folding table just outside the restroom in the engineering lab at the University of Arkansas. Cameron International is a $12 billion oil and gas equipment supply company. NanoMech’s nanoglide lubricant is now packaged as a private label product in Springdale for Cameron International. 

“I came to the University to see someone else, but I was introduced to Ajay and his new theories and practical applications for nanotechnology. Cameron International began funding his research that very day because we were impressed with his work and could see the practical application. We funded him for six months of more research, which he used up in about four months. But over the years we have continued to work in tandem with NanoMech using their lubricants in our global operations,” Bartos said during the Friday event.

Phillips said Cameron is an important flagship customer of NanoMech and is taking their product to customers across the world they would never have access to otherwise. He said the client base is growing to include Fortune 100 companies like multinational General Electric and others who work under a “do not disclose” contract.

Beebe said there is no shortage of applications for nanotechnology which is why he has worked to set up the Nanoscience and Engineering at the University of Arkansas and the Integrative Nanotechnology institute at the UALR which focuses on bio-med applications. Phillips commended Beebe for his foresight to establish the two institutes. Since that time Georgia Tech, Texas A&M and Cal Poly Tech have each established nanotechnology institutes.

Deborah Wince-Smith, CEO of the American Council on Competitiveness and a member of NanoMech’s board of directors, praised NanoMech for its innovative work. 

“In a world of turbulence, transition and transformation, nothing matters more to the competitiveness of companies and countries than innovation and manufacturing prowess. The ability to develop and deploy the most cutting-edge tools and products to bolster U.S. advanced manufacturing will deliver outsized benefits to the U.S. industrial base. NanoMech is at the leading edge of a resurgent U.S. manufacturing capability – one that is not dumb, dirty, dangerous and disappearing; but is smart, safe, sustainable and surging.”

Gov. Mike Beebe, a Democrat who maintains high popularity among voters even as the state shifted to Red, is having fun with his “farewell tour.” There were several serious moments during his Friday (Nov. 21) address to the Northwest Arkansas Political Animals Club in Fayetteville, but Beebe’s verbal timing with a story of his “conversion” to the Episcopalian church drew two rounds of loud laughter.

It was during a summer of work between his college year that saw the young Mike Beebe working for a family of the Episcopalian faith. The pastor of the Episcopal church was coming to visit the family, and the mother asked Beebe to fix him a drink. The pastor’s preferred libation, of which Beebe the young college student was to deliver, was a gin and tonic.

“That got my attention,” Gov. Beebe said with a deadpan delivery resulting in laughs from the audience of at least 150.

Before the last of the laughter trickled away, Beebe finished the story.

“So I joined the Episcopal Church.”

More laughter. And even more laughter when Beebe said his mother told others she knew her son would pick a religion that provided the widest latitude for vices.

A term-limited Beebe leaves office in January when Gov.-elect Asa Hutchinson, a Republican, is sworn in.

Beebe’s address wasn’t all giggles and grins. He began by addressing his decision to pardon his son for a 2003 marijuana possession conviction. Beebe said he is “very strict and conservative” with commutations, but “very liberal” with pardons of non-violent offenses.

“Particularly if they were kids who screwed up,” Beebe said, adding that he’s issued more than 700 pardons for non-violent offenders.

“I refuse to treat him (Beebe’s son) worse than some 700 people similarly situated,” he said.

THE SWAGGER
John Threet, Washington County Prosecuting Attorney and who was recently elected as a 4th Judicial Circuit Court Judge, introduced Beebe by saying he learned in legislative negotiations that the Governor ensured “a place at the table” for all sides as long as the debates were “respectful, sincere and diplomatic.”

Beebe picked up on that during his remarks, and praised Rep. Charlie Collins, a Republican from Fayetteville, for his work to ensure passage of the controversial Private Option legislation. Beebe said Collins certainly did not like the new health care legislation passed in Washington, but worked to find a way to ensure that the realities of the law were implemented in a manner that best suited the people of Arkansas. Beebe told the crowd that those who are “rational and reasonable and will have a little empathy” can work through almost any disagreement toward a solution.

As to his legacy, Beebe said he is proud of the “good positive swagger” among Arkansans in recent years. He said Arkansans today and those of the next generation of leadership should have self confidence that the state “can accomplish things we might have doubted and one point in time.”

Mentioning the expansion event of Springdale-based NanoMech which he attended prior to the Fayetteville luncheon, Beebe said Arkansas “is poised with bright people and risk takers” ready to take the state to the next level.

FROM ROCKEFELLER TO BEEBE
Rogers native Bob Scott, who worked in several high level jobs for Republican Gov. Winthrop Rockefeller, told Beebe during the Q&A session that he was a “continuation of Rockefeller” who brought “an absence of hate” to the political process but may be the last in that line. The remark drew a note of thanks from Beebe and applause from the audience.

Rockefeller, was elected in 1966, being the first Republican to hold the office since 1872. Some Arkansas historians say that Rockefeller allowed for more socially progressive and moderate Democratic governors such as Dale Bumpers, David Pryor and Bill Clinton.

Speaking after the event concluded, Scott, who wears “W.R.” pins on his lapel, said he remains a loyal Republican. However, he said the party is now controlled by too many “conservatives who have reached certitude on everything and don’t have an open mindset.”

“You can’t do that (govern) unless you can compromise. But with these conservatives that word, compromise, that word is now a bad thing,” Scott said.

Families planning to provide a traditional Thanksgiving meal this holiday will shell out just under $50 to feed 10 people. The American Farm Bureau’s 29th annual informal price survey of classic Thanksgiving Day dinner items showed a cost of $49.41, a 37-cent cost increase from a year ago.

The big ticket item – a 16-pound turkey – came in at $21.65 this year. That's roughly $1.35 per pound, a decrease of less than 1 cent per pound, or a total of 11 cents per whole turkey, compared to 2013.

"Turkey production has been somewhat lower this year and wholesale prices are a little higher, but consumers should find an adequate supply of birds at their local grocery store," said AFBF Deputy Chief Economist John Anderson.

Some grocers may use turkeys as "loss leaders," a common strategy deployed to entice shoppers to come through the doors and buy other popular Thanksgiving foods. The Farm Bureau survey shopping list includes turkey, bread stuffing, sweet potatoes, rolls with butter, peas, cranberries, a relish tray of carrots and celery, pumpkin pie with whipped cream, and beverages of coffee and milk, all in quantities sufficient to serve a family of 10. 

Foods showing the largest increases this year were sweet potatoes, dairy products and pumpkin pie mix. Sweet potatoes came in at $3.56 for three pounds. A half pint of whipping cream was $2.00; one gallon of whole milk, $3.76; and a 30-ounce can of pumpkin pie mix, $3.12.

A one-pound relish tray of carrots and celery ($0.82) and one pound of green peas ($1.55) also increased in price. A combined group of miscellaneous items, including coffee and ingredients necessary to prepare the meal (butter, evaporated milk, onions, eggs, sugar and flour) rose to $3.48.

In addition to the turkey, other items that declined modestly in price included a 14-ounce package of cubed bread stuffing, $2.54; 12 ounces of fresh cranberries, $2.34; two nine-inch pie shells, $2.42; and a dozen brown-n-serve rolls, $2.17.

The average cost of the dinner has remained around $49 since 2011.

"America's farmers and ranchers remain committed to continuously improving the way they grow food for our tables, both for everyday meals and special occasions like Thanksgiving dinner that many of us look forward to all year," Anderson said. "We are blessed to be able to provide a special holiday meal for 10 people for about $5.00 per serving – less than the cost of most fast food meals."

The stable average price reported this year by Farm Bureau for a classic Thanksgiving dinner tracks closely with the government's Consumer Price Index for food eaten at home which indicates a 3% increase compared to a year ago.

The holiday shopping season officially kicks off Thanksgiving Day and retailers large and small are prepped and ready. But there is a growing number cynics who say the advertised deals may not be as big a deal for consumers as advertised.

According to NRF’s Thanksgiving Weekend Expectations survey conducted by Prosper Insights & Analytics, six in 10 (61.1%) say they will or may shop either Thursday, Friday, Saturday or Sunday of the Thanksgiving weekend, which equates to more than 140.1 million unique shoppers. Expectations are similar to last year’s preliminary survey results of 140.3 million.

Some 72.5 million (31.6%) say they will wait and see if the deals are worth it before they decide, up 2% over last year’s 71 million “maybe” shoppers.

“Consumers today want more than just the discounts they’ve been showered with since the start of the recession; they want exclusive offerings and a good reason to spend their discretionary budgets,” said NRF President and CEO Matthew Shay. “We could witness a sea change this holiday season as consumers’ reliance on extremely deep discounts over the biggest shopping weekend of the year shifts to more of a ‘wait-and-see’ mentality around what retailers will be offering on Thanksgiving Day and Black Friday. We are positive retailers have a few tricks up their sleeve that will draw their customers to their stores and websites, deciding the deals are worth it after all.”

Wal-Mart recently unveiled a 5-day savings extravaganza for its stores beginning Thanksgiving Day. Walmart.com will kick-off its own Cyber Week Savings on Saturday Nov. 29. Macy’s also has a 5-day sale before Thanksgiving.

A number of retail experts have said much of the hoopla around Black Friday is geared around promotions of depreciating items like electronics and apparel. And on the seemingly best bargains there are often limited quantity.

“There are often limited quantities on the hottest deals and shoppers in many cases can get better bargains by waiting or shopping online,” noted Stacie Widlitz, a CNBC retail contributor.

A new study by NerdWallet finds that a number of the deals being offered for Black Friday are no better than what was offered last holiday season, or even a week or two earlier.

"Retailers keep offering the same kind of deals on Black Friday that consumers could have gotten for the same price last year," said Matthew Ong, senior retail analyst for NerdWallet.

In a NerdWallet analysis of 27 Black Friday advertisements, 25 retailers listed at least one product for the exact same price in 2014 as in their 2013 Black Friday ad. That means 93% of retailers are repeating Black Friday products – and prices – from year to year. 

Analysts predict it’s going to be a highly promotional holiday that has already begun, which likely means more discounts will be added through the month of December as the Christmas holiday approaches.

Retailers often make Black Friday deals look better by comparing them to a manufacturer's suggested retail price, even though they normally offer a discount from that price. NerdWallet found that Sears is offering the Samsung 55-inch 1080p 120Hz Smart LED HDTV at $599.99, which they compare with the list price of $1,199.99. But Sears was selling that same TV for $807.49 shortly before Black Friday, the researchers found.

"Consumers are looking for the big discounts," Ong said, adding that the smart consumer will check prices on a company's website before the promotions take effect to see if the discounts are all they seem to be.

A new report from comScore predicts total online retail spending for the November–December period will reach $61 billion, a 16% gain versus year ago.

“Although some lasting effects of the great recession still provide some overhang on the economy, many of the latest indicators point toward signs of optimism for consumer spending during the holidays. Negative economic sentiment is at a five-year low, the stock market is near all-time highs, and inflation has been kept in check,” said Gian Fulgoni, chairman emeritus of comScore.

Lori Douglas of East Texas said she’s hooked on Amazon Prime.

“I may not even go to the mall at all this year. Free shipping is a must and I am sure UPS is gonna get sick of me,” Douglas said.

Tonya Sellers enjoys shopping online from the comfort of her Benton County home. She refuses to deal with crowded shopping malls and discount stores on Black Friday. She would rather sleep late on Black Friday and take her chances on bigger sales closer to the holiday. 

“I find most of what I need online and when possible I pick up the items in-store and save the shipping cost,” she said.

Walmart.com says it’s doubling down on Cyber Monday this year, offering more than twice the number of deals compared to last year, and delivering it on a new web site that makes shopping easier and faster with free shipping on the season’s hottest gifts all week long.

The retailer believes that with Cyber Monday falling on Dec. 1, which is payday for millions of Wal-Mart customers, sales will be strong. The retailer is providing a sneak peek into the Cyber Week savings online. Wal-Mart reminds shoppers they can shop online and then pay cash in store when they take advantage of Wal-Mart’s checking cashing services Dec. 1.

A long empty downtown Fort Smith building could be coming back to life if a planned sale of the property by the Central Business Improvement District to a local developer goes through as planned.

The 1,725 square foot property, located at 701 Rogers Avenue, is under contract to be sold to Core Real Estate of Springdale for a price of $95,475. The Core Brewing Company is well known in Northwest Arkansas.

Fort Smith Deputy City Administrator Jeff Dingman, who serves as a liaison between the city and the CBID, said the buyer has not filled the city or the CBID in on what exactly its plans for the property are.

"We don't know what their intentions are, but we do know they want to create it as a place for a pub in order to market their products. He's mentioned a pub or tasting room, that sort of thing," Dingman said.

The memo was drawn up Nov. 11, with a due diligence period of 30 days being in place before the closing date, which Dingman said was not known to the city.

Rodney Ghan, a CBID member and owner of R.H. Ghan & Cooper Commercial Properties, is the listing agent for the property.

The property in question, Dingman said, has long been a part of the CBID's small collection of properties in downtown which were intended to provide rental income to fund operations.

"When the CBID was originally formed, their first project and purpose was to build the state office building across from city hall," he said. "As part of that, they had to acquire some property and this building was part of that. That's how they came to own it and have it for a long time.

"They weren't actually trying to sell it," Dingman added. "It had been vacant for a long time, but they did some roof work and HVAC and couldn't lease it out. I'm not sure how much they tried, but they didn't have any success."

He said when Jesse Core reached out to Ghan about the property, the company quickly changed the conversation from leasing to owning.

With the company possibly looking to open a pub on Rogers Avenue, it would represent one of the first commercial projects along the downtown strip of Rogers Avenue that is not tied to a hotel development. For that reason, Dingman said it could be a game changer for the neighborhood and possibly drive others to invest just a block over from Garrison Avenue, which has seen significant investments of late with Bricktown Brewery recently investing more than $500,000 in renovations to the former Varsity restaurant and bar.

"I like the idea of Rogers starting to develop a bit," Dingman said. "It's got some proximity to hotels and a lot of traffic, presumably. They walk by this building on the way to Garrison and back."

The location does not come with its own dedicated parking, though it is located along the same block as the city-owned parking garage on Rogers.

As for renovations of the property, since the property still lies within the CBID, he said some guidelines would need to be followed just as properties along Garrison must follow strict guidelines.

"The design guidelines are essentially the Garrison Avenue District Design Guidelines. Now, this building is not on Garrison, but it is in the CBID," he said. "I don't have any idea what their property dress is going to look like, but we will work with them as much as we can or are able to (in the renovation process)."

The CBID's most recent financial statements as of Nov. 2 show a balance of $86,836 in its savings account, with an additional $23,890 in checking, making its cash on hand $110,726.

Revenues for the CBID include $5,410 in monthly rent payments from the University of Arkansas at Fort Smith for use of the former Second Street Live location, now known as the Blue Lion.

Arkansas lawmakers received a report from the Bureau of Legislative Research that outlined 8 potential options to curb prison overcrowding, including a $231 million new prison bond issue, hiring a private prison firm, and alternatives to drug sentences and re-entry programs.

The Joint State Agencies committee on Monday (Nov. 24) reviewed the report that Senate Chairman Eddie Joe Williams, R-Cabot, said would be the foundation for potential legislation in January. He also said the study was intended to give Gov.-elect Asa Hutchinson an “objective look” at the current crisis and possible alternatives.

More than 2,500 state prisoners are backed up in county jails costing the state money and stressing county budgets. More than 17,000 prisoners are currently housed in state prison facilities.

The recommendations included:
• Construct a 1,000 bed maximum security prison using a 30-year “wrap-around” bond issue estimated to cost $231 million (including principal and interest), excluding annual maintenance and operations expenses. The debt service would be covered by raising car tag decals by $2 annually.

• Review the successes and failures of Act 570, which altered sentencing guidelines.

• Mitigate longer sentences utilizing correctional interventions and re-entry programs.

• Consider using abandoned school buildings across the state rather than new construction to expand re-entry programs.

• Enlarge and expand the existing drug court program.

• Consider a private corrections management service provider that purports to have a lower per-inmate daily cost.

• Expand the Smarter Sentencing program in order to mitigate longer sentences.

• Consider funding the increase in the Arkansas Community Correction transitional beds program.

Arkansas Department of Corrections director Larry Norris told the panel that he’s open to all of the suggestions in the report, even if he’s not around to implement them. But he warned that a new maximum security prison would eventually have to be built – a process that could take three years to construct.

“Somewhere along the way, it’s going to have to happen,” Norris told the legislative panel.

Williams said he saw no support for the bond issue for a new prison until all other alternative approaches had been vetted.

“At the end of the day, the bad people need to go jail,” Williams said. “If we try these alternatives and we still need a 1,000 bed facility, then we’ll take that up. But until we look at alternatives to our current process, if we build a 1,000 bed facility, guess what we’re going to do? We’re going to fill it up. And then we’re going to want another 1,000 beds and another 1,000 beds.”

With a recidivism rate of 43%, Williams said there is a high number of nonviolent prison parolees who can complete their terms through transitional housing, re-entry programs and with help for drug rehabilitation.

“There’s a large percentage of that (57%) that never need to go to top security prison – they need to be in jail – they need to go to a minimum security facility,” Williams said.

He said he’s been studying the possibility of using abandoned schools or buildings across the state that could be brought up to code with minimal investments as a housing place for the minimum security population. Williams suggested that 300-500 parolees could be housed at 3-5 facilities around the state minimizing the burden now on the counties.

“We can parole people to these facilities and let them fail or succeed in a very controlled environment. We’re not doing a good job of that,” Williams said.

He also said that many of these individuals need drivers licenses, GEDs and job prospects.

“If we’re going to parole these people, we should demand that they have these things and we can do that today.”

Williams also was optimistic and said he plans to pursue a private jail management firm that is currently running a facility in Homer, Louisiana. He contends that the company is spending $28.50 a day per inmate, far below Arkansas’ prison cost at Wrightsville of $58 a day.

“Nothing’s off the table at this point,” he said.

Turkey is often the overlooked protein by consumers perusing their grocery meat case – except, of course, for the Thanksgiving Holidays when the big birds take center stage. But, turkey processing is big business in Arkansas. The Natural State will rank second only to Minnesota in pounds processed annually this year, according to the National Turkey Federation.

Cargill Meat Solutions operates a large processing center in Springdale, employing 1,000 workers and running at full capacity this time of year, according to Mike Martin, corporate spokesman with Cargill.

“The Springdale plant will celebrate its 50th anniversary in 2015. More than 250 million pounds of turkey products are processed at Cargill’s Springdale plant annually – more than 1 billion 4-ounce servings,” Martin said.

He said Cargill relies on 80 turkey growers in Arkansas and a few in Missouri to supply the local plant with the birds it processes. Susan Watkins, poultry specialist at the University of Arkansas, said the whole birds making their way into local grocers this week marked as “fresh” began their lives in the spring in Cargill’s hatchery in Gentry.

Watkins said this time of year the local Cargill plant and two Butterball plants — Huntsville and Ozark — are running “fresh” whole birds that range from 15 to 20 pounds.  

FRESH LIFE CYCLE
“The fresh season is dominated by whole bird production. Cargill started planning for Thanksgiving demand back in the spring with the number egg placements. The genetic selection for whole birds includes their white color and a balanced size between breast meat and dark meat,” Watkins said.

There is a 28-to 30-day incubation period in the hatchery. The turkey poults are moved to a growout house a couple of days after hatching, where they are fed a diet of corn and soybean meal to yield their final weights over a 16-week period, according to Watkins.

It is usually the hens that are sold as whole birds, while the toms are processed into cutlets, deli meats, turkey franks, sausages and tenderloins.

Fresh turkey signifies that it has not been frozen below 26 degrees and was recently slaughtered and processed. Fresh varieties sell for a premium as opposed to frozen birds.

“The grocer takes on more risk for handling these birds. There is a fairly short window to sell them before you smell them. Many times grocers require a preorder for fresh turkey because they will not want to end up with an excess supply,” said Dr. John Marcy, processing specialist at the University of Arkansas.

Marcy said the fresh birds are processed whole which is more labor intensive than traditional broiler operations. He said turkey plants employ up to twice as many workers as a chicken plant because so little of the processing is automated because of the heavy bird weight and the variances in sizes from flock to flock. 

On the large end, toms can weigh up to 35 pounds, where as a fresh whole turkey hen could be as small as 12 to 15 pounds.

Watkins said by Tuesday (Nov. 25) most turkey plants running fresh whole birds will shift to other runs because birds coming off the line after Tuesday won’t end up in a retailer by Thanksgiving Day. 

TURKEY CONSUMPTION
Watkins said the turkey is by far the most efficient of all meat proteins. It takes just 35 pounds of feed to yield a 16 pound turkey, and the grain they eat is not suitable for human consumption.

“When compared to growing a chicken we can get twice the amount of weight in a turkey using the same amount feed as an 8-pound chicken. Feed is 70% of the cost of growing a life turkey,” she said.

Despite the value turkey holds compared to other proteins, consumer preference for the meat is stagnant. Turkey consumption per capita is about 16 pounds annually, which has been flat since 2011 and declining from 17.7 pounds a decade earlier, according to the National Turkey Federation. Although 50% of all turkey consumed in 1970 was during the holidays, today that number is around 31% as more people eat turkey year-round.

That said, turkey consumption ranks a distant fourth at 16 pounds, behind pork with a 46.8 pound consumption per capita last year. Per capita, consumers ate 56.3 pounds of beef and 81.8 pounds of chicken.

Watkins said the turkey industry has not properly marketed their new products and are not pushing higher margin items like the chicken industry.

“I expect that will change now that Tyson Foods has acquired Hillshire’s turkey business. I can’t wait to see what happens when Tyson puts its innovation insights into Hillshire’s turkey operations. I look for there to be some innovative new turkey products coming down the pike. It’s been a long time coming,” Watkins said.

The corporate shuffle continues at Wal-Mart with news that Duncan MacNaughton, chief merchandising officer for the retailer’s U.S. division has resigned just ahead of the Black Friday. This news comes as the reporting structure within the marketing division recently shifted to the new Walmart U.S. CEO Greg Foran.


Mac Naugton’s bio has been removed from Wal-Mart’s corporate website. Rumors have swirled about Mac Naughton’s future with the company when Wal-Mart CEO Doug McMillon selected Foran for the U.S. CEO job. Local sources confirmed that Mac Naughton’s wife moved to Texas more than two months ago in preparation for his departure.


Wal-Mart confirmed Mac Naughton’s departure with the following statement from Foran:
“Today, I’m going to share with you leadership changes within our Walmart U.S. Merchandising organization. Duncan Mac Naughton, Chief Merchandising Officer – Walmart U.S., has decided to leave the company to pursue new opportunities. I’d like to thank him for everything he’s done for Walmart, and specifically our U.S. business.
 
Duncan’s departure has allowed me to relook at our Merchandising structure and the incredible talent within the team. At this time, I have chosen not to name a new Chief Merchant. I would like to use this opportunity to get closer to the Merchandising organization, so effective immediately, these leaders will report directly to me with the following responsibilities.”

The exit is not unexpected as Mac Naughton was once believed to be the shoo-in for the top U.S. job back in July when CEO Bill Simon parted ways with the retailer. McMillon’s selection of Foran for the job was a surprise, but has since won favor with Wall Street analysts given Foran’s aggressive operational strategy to improve U.S. sales.

“If you look at some of the recent talent selections in the C-suite it’s apparent that Wal-Mart is looking for something different, casting a broader net to gather people with varying experiences,” said Allan Ellstrand, expert in corporate leadership and professor at the University of Arkansas.

He adds that if companies always do things the same way with the same people it’s hard to get different results. McMillon and Foran have each said they are after higher sales and better performing supercenters.

“Research shows that bringing in outside talent can be more contentious, but overall, companies that do it often get richer, better and more compelling results,” Ellstrand said. 

Mac Naughton joined the company in 2009 as chief merchandising officer of Wal-Mart Canada and moved to the merchandising operations at the U.S. business in 2010.

While a popular figure, Mac Naughton and Simon struggled with sagging same-store sales for seven quarters. Those figures just recently returned to positive territory.

“I am a little surprised by the timing of the departure given this is the busiest time of year for a retailer,” Ellstrand said.

With Foran at the helm all eyes will be on his leadership through the holiday season. Wal-Mart execs warned there could be negative financial pressure this quarter from the macro economic standpoint, but they expressed hope that lower gas prices will equate to more merchandise sold.

The last time Mac Naughton spoke publicly was walking reporters through the Black Friday sales plan. During the October investor meeting, Foran fielded questions on Wal-Mart’s store operations in a candid manner. He admitted that inventory was too high, store staffing too short in some cases and there was much work to do in the area of “fresh” merchandising. 

Mac Naughton chimed in to say that inventory was up largely because of new store additions and the Port of Long Beach issues which had the retailer ordering earlier than normal for the holidays. While the exchange was cordial enough there was a sense of tension in Mac Naughton’s effort to justify the higher inventory levels.

“Looking at Bentonville you can see Wal-Mart is looking for something different. It’s visible in their varying formats — pickup, convenience and explosion in Neighborhood Markets. Bentonville has become a lab for formats because they see this as the next potential growth engine. This innovation requires risk taking and diverse talent selection,” Ellstrand said.

He said an executive of Mac Naughton’s caliber and experience level has a great deal of options when he does finish his tenure at Wal-Mart.

Foran’s email to Wal-Mart employees also laid out other details in the management shuffle.

Steve Bratspies will transition from his role as executive vice president of general merchandise and food, which includes a strong focus on fresh.

Andy Barron will retain his role as executive vice president of softlines and will assume responsibility for general merchandise.

Michelle Gloeckler will remain executive vice president of consumables and U.S. manufacturing.

Labeed Diab, senior vice president, and his health & wellness team will transition to report to Michelle.

John Aden will remain in his current role as executive vice president of sales innovation.

Scott Huff will remain in his current role as executive vice president of merchandising operations.

Jack Sinclair will be helping to transition the food business over the coming weeks before taking another role within Wal-Mart, to be announced at a later date.
 
“Through Duncan’s leadership, we have focused on developing our merchants while also driving stronger collaboration between marketing and merchandising. This has made us more relevant to and focused on our customers. I also think it’s important to recognize Duncan for his leadership in re-engaging with our suppliers to develop joint business plans. This work is resulting in better and more localized assortment in our stores.
 
In partnership with the operations team, Duncan has driven customer-centric innovations that we will build from to move forward. He’s always been, and I’m sure always will be, an advocate for our customers and our stores. We’ll miss his creativity and energy. Please join me in thanking him and wishing him well,” Foran concluded in the email.

Carol Spieckerman, CEO of NewMartketBuilders, applauded the retailer's recent efforts to steer a new course.

"The great news is that Wal-Mart is doing a great job of incubating talent and building executive bench strength. The other side of that coin is that not every leader will complete their career trajectory at Wal-Mart. There are only so many slots. Wal-Mart is clearly heading in a fresh direction when it comes to its merchandising initiatives, particularly at the store level, and Greg Foran is messaging that clearly."

Spieckerman said over the past few years, most retailers have found themselves dumping resources into playing a mean game of digital catch-up. As a result, some are awakening (or soon will) to the fact that their stores have gotten a bit musty.

"In this climate, Greg Foran is sending an important message by making it clear that the next wave of store-level block and tackle work will have Wal-Mart fully leveraging its physical assets at a time when doing so has never been more critical to the company’s overall omni-channel strategy. Although Wal-Mart may have gone ditch to ditch on some initiatives in the past, Foran isn’t talking about driving in-store efficiencies at the expense of digital, he is making sure that the stores don’t get lost in the equation. That kind of synergistic thinking will put Wal-Mart ahead of the pack as others struggle with balancing bricks and clicks," Spieckerman said.

Sebastian County Judge David Hudson hopes Tuesday's (Nov. 25) meeting of the quorum court is the last related to the upcoming 2015 budget, but at least one justice of the peace may throw a wrench in Hudson's plans.

Hudson said budget meetings held this month have resulted in a collective decision of the court to add a 2% cost of living adjustment (COLA) to the budget for all county employees, as well as deferring $528,000 in capital until February 2015. The only capital that has been included in the latest revisions to the budget include $223,000 for sheriff's department fleet vehicles.

The delays, Hudson said, include computer equipment, vehicles for other county departments, approval of the second year lease payment on golf carts at Ben Geren Regional Park and other small equipment, including mowers.

"We will reevaluate those based on year end balances," Hudson said, adding that the court had also identified about $80,000 to $96,000 in operating cuts for the budget.

"There's a lot of those we reviewed with different department heads and officials to see if cuts could have been made. It could have been utilities, a variety of things. … There was analysis of some areas where some of the operations increases could be reduced. We continue to meet with people and evaluate that."

Hudson said with the cuts and deferrals made to the budget, with revenues estimated at $21.286 million in the general fund next year, he hoped to wrap up the budget reviews before Thanksgiving.

"I'm hoping that that will be the final discussion (on Tuesday) and then work can begin on putting an exhibit together that will be adopted in ordinance on December 16," he said. "We're trying to get final discussions by Thanksgiving, but we take this to exhibit form and to ordinance for adoption, so it takes several days."

Justice of the Peace Danny Aldridge said while Hudson may be ready to wrap up discussions, he has "several things I'm wanting to talk about." The most pressing, he said, was what to do about the Sebastian County EMS service.

In the budget documents provided by Hudson's office, it is shown that the EMS budget has increased by $300,743 from 2009 to 2013. The only other department in county government to see a higher increase was the jail, whose budget increased by $1.085 million. The jail is under a consent decree from the United States Department of Justice which has necessitated much of the increase in funding.

From 2014 to 2024, the county has reallocated how it spends its portion of the countywide one cent sales tax proceeds, upping the jail's portion by 10.5%, the EMS budget by 2%, the parks department by 1% and rural fire by a half percent, while reducing capital expenditures from the sales tax proceeds by 14%. But Aldridge said the ambulance service, which serves as the only EMS provider in communities like Hackett and Lavaca, is putting a drain on the general fund.

"One of the things that we've got to face is the fact that the ambulance service in Sebastian County is creating a huge financial drain on the general fund and we're going to have to look at reducing services, getting rid of the ambulance service or changing the way in which they're operating in order to reduce that drain. It doesn't have to make money, but it's got to be not such a burden on the county general fund."

The service is pulling about $650,000 per year from the general fund and that is after county residents in service areas pay an annual fee of $18 to support the ambulance services. Another revenue source is insurance payments, though Aldridge said he is unsure how vigorously the county pursues payment from insurance following the transport of patients.

An area he said could save money is by cutting the more than $160,000 in overtime costs to staff at Sebastian County EMS.

"I content that we could hire several more people on a part-time basis and pay out less overtime. There's always some overtime, yes. … But not $160,000 plus in overtime. Maybe we can reduce that by half by hiring additional personnel. Maybe more. That would create a morale problem with (current staff) because they love this overtime they're getting. But we can't afford it. It's a terrible way to say it, but the county general fund is being held hostage by the Sebastian County ambulance service."

Aldridge said services are needed in rural Sebastian County, but he may propose going as far as privatizing the service to save the county money.

Hudson said Friday (Nov. 21) that "adjustments are still being looked at," adding that options to reduce the county's budget could still be implemented before the final ordinance is presented on Dec. 16.

The Nov. 25 meeting will be held at 6 p.m. in the Quorum Courtroom located on the second floor of the Sebastian County Courthouse in Fort Smith.

Home sales in the region were up double digits in October, the second month in a row that Crawford and Sebastian Counties posted such growth, more than doubling the growth rate both counties had posted in September.

In Crawford County, home sales were up 52.93% in October 2014 compared to the same month last year, while September saw an increase of 13.75% over the same period in 2013. Sebastian County posted even higher numbers coming in at 65.6% for October over the previous month. In September, Sebastian County's growth over August stood at 18.74%.

Looking at the sales volume, Crawford County posted $7.572 million in sales last month compared to $5.069 million in October 2013. Sebastian County saw sales of $21.581 million in October 2014 compared to $13.032 million in October 2013.

Kevin Clifton, owner and broker at Kevin Clifton Realty in Van Buren, said two factors were at play in the region. The first factor in Van Buren's favor was the expected expiration of the FDA's Rural Development Loan program in the city. He said the one year moratorium that lent the program an extra year of life did not stop sales already in motion. Thus Van Buren and Crawford County's real estate market were the direct beneficiaries, according to Clifton, with homeowners rushing to secure the no money down mortgages.

"When it was (a real possibility of losing the Rural Development Loans, there was) that scare factor, even in my office," he said. "We've closed 91 homes in the last six months just in my office. Of those, 41 of those were in the last month. For an office of five people, that's amazing to see the difference."

The second factor at play in Sebastian County's favor is development taking place in Chaffee Crossing which is expected to grow as ArcBest locates its new corporate headquarters on a site at the former U.S. Army installation.

"We have a bit of a better job force going now and there are a number of new construction versus used. It has been several years since it's been a choice for buyers for new construction in multiple areas and multiple price ranges (in Fort Smith)," he explained.

"There is the typical growth (helping Fort Smith) and then the new construction. When you have two or three new subdivisions in Sebastian County pushing new homes onto the market, especially comparing 2008 numbers to now, it's a night and day difference from where we were just a few years ago."

With the growth both markets have experienced, the average sale price in Crawford and Sebastian Counties increased substantially from last year to this year. In Crawford County, the average price in October 2013 was $112,641 while October 2014 saw $135,214, an increase of 20.04%. Sebastian County saw a rise from October 2013's average of $121,796 to an average of $172,648 in October 2014. The figure represents a rise in average sales price of 41.75%.

The new construction, Clifton said, helped drive Sebastian County's numbers higher while the rush to buy in Van Buren pushed Crawford County's numbers higher.

"Sales price numbers were up because of the number of homes on the market," he said, adding that the number of pending sales or under contract limited the supply.

As for next year, he said it is hard to tell what will happen in Sebastian County though he said Crawford County will see another rush at the end of the year as the Rural Development Loan's moratorium comes to a close and the fear of losing the loan altogether drives sales.

"I foresee us having that same situation happen. … You have a whole new set of buyers look at that time compared to where we are right now in this year. We will have that rush again just like this year and numbers for the last quarter of the year will be tied to the scare factor of losing Rural Development for Van Buren."

Of course, before agents get to the last quarter of next year, they have to make it through the typically slow winter months and the summer. But the winter months, he said, could create a slump agents will be working all year to get out of.

"The weather will play a big part in that first quarter for us," Clifton said. "Consumers just don't want to get out in that (cold, snow and ice). As long as the weather stays steady, we'll still have a good first quarter."

Home Sales Data (January - October)
• Crawford County
Unit Sales
2014: 525
2013: 422

Total Sales Volume
2014: $62.334 million
2013: $47.071 million

Median Sales Price
2014: $108,750
2013: $106,500

• Sebastian County
Unit Sales
2014: 1,161
2013: 1,055

Total Sales Volume
2014: $158.792 million
2013: $145.515 million

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

City and countywide sales tax revenue has improved in recent months, but is struggling to meet or exceed budget estimates. The city's sales taxes (1% for streets and 1% combined for water and sewer projects and fire and parks and recreation) collected $3.363 million in the October report. The figure is 4.76% above October 2013 and 2.27% ahead of budget projections for the month of October.

For the first 10 reporting months of the year, the total tax collections including the October report from the city's sales tax collections are up 2.21% but below budget projections by 0.22%. (Because the state of Arkansas has a two-month delay in reporting collections back to the cities, the city of Fort Smith — for budgeting purposes — has historically reflected the collections on a one-month delay. Which is to say, the tax collections remitted to cities in October are from taxes collected in August and transferred by merchants to the state in September.)

Collections so far in the 2014 reporting period of the city's sales taxes were $33.45 million, up from collections of $32.726 million during the same period in 2013. The same 10 months in 2012 saw collections of $33.064 million. The city sales tax for fire and parks did not begin collecting revenues until 2012.

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

Fort Smith's share of the countywide sales tax in the October report was $1.323 million, which was an increase of 6.01% over $1.248 million in October 2013. The figure was also 5.51% above the budget estimate.

The countywide tax collection is critical because the revenue is a little more than 40% of the city’s general fund operating budget of roughly $48 million. A majority of the general fund budget supports fire, police and other critical city functions. The dip in collections compared to budget estimates has resulted in city officials seeking 4% budget cuts from all departments.

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

The Fort Smith Board of Directors is expected to conduct a third review of the 2015 during a Tuesday night (Nov. 25) meeting. Public hearing and adoption of the budget is set for 6 p.m., Dec. 6, at the Fort Smith School Service Center.

Board members and city staff have proposed various methods to balance the budget while also providing cost-of-living raises for employees and meeting a potential shortfall in a pension fund for police and fire department employees.

PREVIOUS ANNUAL COLLECTION INFO
Fort Smith 2% sales tax collection (1% for streets; 1% for water/sewer bonds)

2013: $38.937 million

2012: $39.210 million

2011: $38.683 million

2010: $37.229 million

2009: $37.554 million

2008: $41.226 million

2007: $37.858 million

2006: $36.840 million

Fort Smith portion of 1% countywide sales tax

2013: $15.353 million

2012: $15.279 million

2011: $15.15 million

2010: $14.89 million

2009: $15.04 million

2008: $16.61 million

2007: $15.15 million

2006: $14.71 million

Officials with Houston-based Oxane Materials plan to close their Van Buren proppant manufacturing facility on Jan. 23, 2015. The closure will result in the loss of an estimated 70 jobs.

Notice of the closure was a letter dated Nov. 24 to Van Buren Mayor Bob Freeman from Chris Coker, president of Oxane Materials.

“Please be advised that on January, 23, 2015, Oxane Material, Inc. expects to permanently close its business operations located at 3003 Industrial Park Road, Van Buren. ... The result of this action will result in the termination of employment for all employees working for the Company at this location,” Coker wrote.

Freeman told The City Wire that he was shocked at the news. Prior to the letter, there was no hint of problems at the company.

“We received notification this morning that Oxane Materials expects to close the facility in Van Buren on January 23, 2015. The news was completely unexpected. Oxane has been a vital part of our community and we have been proud to be the home of their operations. It is most unfortunate for their employees and the families affected and our thoughts and prayers go out to them,” Freeman noted in a statement. 

The company uses a patented nanotechnology process to produce ceramic proppants that are injected into geologic formations to “prop” open fissures and allow oil and natural gas to be drawn out. The technology was first developed at Rice University. Company officials have said the Oxane proppant is lighter and stronger than most other proppants and is often used with traditional proppants to reach deeper into shale formations.

News of the closure is certainly a departure from what Coker was saying earlier in 2014. In a May story at Rigzone, Coker said the company was unveiling its new “OxThor” proppant product for use in high-pressure, high temperature wells. Many of those type of wells are drilled by deepwater rigs.

Coker said in the story that the new proppant would be produced in Van Buren beginning in June. He also said the company posted record production of 40 million pounds of proppant in 2014.

As of August 2011, Oxane employed 60 at the plant which produces proppants for the energy exploration (natural gas and oil) sector. The company said in 2010 it would initially invest $15 million in the Van Buren plant. In late 2011 the company said it had plans to invest up to $100 million in Van Buren and possibly employ 350 by the end of 2013. That expansion never fully materialized.

Obviously, the closing will not help a Fort Smith metro labor market that has not recovered from the Great Recession.

The size of the Fort Smith regional workforce during September was 126,104, up from 125,739 during August, but below the 130,684 during September 2013. The labor force reached a revised high of 140,253 in June 2007, meaning the September workforce size is down 10% from the peak number.

The number of employed in the Fort Smith region totaled 118,911 in September, up from 118,030 in August, and an estimated 1,987 jobs below the 120,893 employed in September 2013. The September employment is also 11.1% below peak metro employment of 132,779 in November 2007.

The City Wire will update this story later today.

A federal judge has struck down Arkansas’ ban on same-sex marriages, but she issued a stay in the ruling as it is expected to be appealed.

U.S. District Judge Kristine Baker said Amendment 83, a 2004 voter-approved measure defining marriage as between a man and a woman, was unconstitutional under the 14th amendment of the U.S. Constitution.

“The Court declares that Arkansas’s marriage laws — Amendment 83 of the Arkansas Constitution and Arkansas Code Annotated §§ 9-11-107, 9-11-109, and 9-11-208 — violate the Due Process Clause and Equal Protection Clause of the Fourteenth Amendment to the United States Constitution by precluding same-sex couples from exercising their fundamental right to marry in Arkansas, by not recognizing valid same-sex marriages from other states, and by discriminating on the basis of gender,” Baker wrote in her 45-page decision.

“This Court finds that the Arkansas marriage laws at issue here overstep this constitutional limit. The Due Process Clause prevents the government from infringing upon a fundamental right “unless the infringement is narrowly tailored to serve a compelling state interest.” Likewise, under the Equal Protection Clause, if a state makes a classification that “impinge[s] upon the exercise of a fundamental right,” then the state must “demonstrate that its classification has been precisely tailored to serve a compelling governmental interest,”” the ruling said.

Baker’s ruling is expected to be appealed, leading the judge to stay her decision.

The federal lawsuit was brought by two gay couples, Rita and Pam Jernigan and Becca and Tara Austin. The Arkansas Supreme Court is also reviewing a case regarding same-sex marriage, but has not issued a ruling yet. That review is of a May 8 ruling by  Pulaski County Circuit Judge Chris Piazza that Amendment 8s was unconstitutional.

Piazza’s ruling followed a January 2014 ruling by U.S. Federal Judge Terence Kern that struck down Oklahoma’s ban on gay marriage. Kern, based in Tulsa, said the gay marriage ban approved by Oklahoma voters in 2004 violated the U.S. Constitution's 14th Amendment under the equal protection clause.

Baker acknowledged that her decision would be controversial in undoing the 2004 law that passed with nearly 75% of the vote.

“This Court does not take lightly a request to declare that a state law is unconstitutional,” Baker said in her ruling. “Statutes are passed by the duly elected representatives of the people. It is not on a whim that the Court supplants the will of the voters or the decisions of the legislature. Even so, these interests do not address any specific reasons for the marriage laws at issue; instead, they represent the type of generalized, post hoc, and litigation-reactive justifications that strict scrutiny disallows.”

Jerry Cox, head of the Arkansas Family Council, did not like the ruling but was happy the ruling was suspended pending the appeal process. The AFC pushed the campaign that resulted in passage of Amendment 83.

"At least with this ruling, we know what we have and it's not unexpected in light of how other federal courts have ruled. It's our hope that eventually the will of the people of Arkansas will be upheld rather than the wishes of judges,” Cox said in this report from ABC News.

Chad Griffin, an Arkansas native and president of the national Human Rights Coalition, praised the ruling.

"More than five hundred committed and loving gay and lesbian couples have already married in the state of Arkansas, and two separate courts have now both declared that the state's ban on marriage equality is unconstitutional,” Griffin said in a statement. “There's no excuse for delaying justice even one more day. I am proud to be an Arkansan by birth, but I'll be even prouder when this shameful stain on the state Constitution is erased once and for all. Thanks to today's historic ruling and the courageous plaintiffs and attorneys who made it possible, that day is closer than ever before."

Coincidentally, U.S. District Judge Carlton Reeves overturned on Tuesday a same-sex marriage ban in Mississippi. Attorneys for the state said they would pursue an appeal of Reeves’ injunction against the ruling. Mississippi voters approved in 2004 a constitutional amendment defining marriage as between a man and woman.

Arkansas Electric Cooperative Corp. (AECC) announced Tuesday (Nov. 25) that it plans to add 150 megawatts of potential “green power” to its energy portfolio after reaching a long-term purchase agreement with an Oklahoma wind producer.

The deal with The Origin Wind Farm located in Murray and Carter counties in southeast Oklahoma will enhance the Arkansas cooperative’s long-term commitment to “generation diversity,” said Duane Highley, president and CEO of AECC.

“With the addition of this wind energy, AECC has 201 megawatts of wind energy in its generation assets,” Highley said. “AECC has access to more than 459 megawatts of energy via hydroelectric generating stations and power purchase agreements in addition to our baseload assets. We continue to explore energy options to provide the 500,000 electric cooperative members in Arkansas with reliable, affordable energy.”

The Origin Wind Farm is owned by the North American subsidiary of the Enel Group, the Europe-based conglomerate that mainly focuses on energy generation from renewables sources. Enel operates some 750 plants in 16 countries across Europe and North America.

Enel’s installed capacity amounts to about 8,900 megawatts of wind, solar, hydroelectric, geothermal and biomass, company officials said. The global green energy supplier has announced plans to up its installed capacity to 13,400 megawatts by 2018, with a forecasted generation of about 45 billion kilowatts.

The Origin Wind Farm’s expected output from the 75 turbines on the 17,600 acre Oklahoma wind farm is 650,000 megawatt-hours, approximately enough energy to serve 50,000 homes. AECC will be the sole recipient of that power generation.

The Arkansas cooperative also has a long-term power purchase agreement with BP and Sempra U.S. Gas and Power for 51 megawatts from the Flat Ridge 2 South Wind Farm in Kansas.

“AECC has a diverse mix of energy including coal, natural gas, hydroelectric, biomass and wind to shield our members from potential spikes in generation fuel costs,” said Andrew Lachowsky, vice president of planning, rates and market operations for AECC. “The cooperative also works to secure the lowest cost power via the wholesale energy markets.”

Little Rock-based AECC said its agreement with Enel’s Oklahoma wind farm was made possible through the National Renewables Cooperative Organization (NRCO), which enables cooperatives nationwide to pool the ownership and benefits of renewable resources. The Electric Cooperatives of Arkansas comprise 17 electric distribution cooperatives across the state.

Student debt has become a trillion dollar problem in 2014 but experts say those on the hook for massive amounts of debt aren’t all 20-something-year-old college graduates or dropouts.

“There is a growing number of borrowers who were older adults who returned to school to finish degrees or parents who took out loans for the children who are in the 50s and 60s,” said Eric Best, co-author of “The Student Loan Mess: Good Intentions Create a Trillion Dollar Problem.”

He said student loan debt is rising more than $100 billion every year. Best predicts student loan debt will reach $2 trillion by 2020 and it threatens to become the sequel to the mortgage meltdown. His research found that among recent college students who in payment mode, more than 33% are delinquent.

Best recently wrote an opt-ed piece for the Wall Street Journal that featured a former grad student whose $70,000 loan has ballooned into a $270,000 debt since she graduated in the mid 1990s. Like many, the student managed to defer, consolidate her loans and over time they compounded at quadruple the original debt.

Her teaching jobs garners her between $30,000 and $40,000 annually and she’s enrolled in more classes part-time toward a business degree to continue deferring the $1,200 per month she already owes in student loan debt.

Chris Lewis, 42, is still repaying student loans and she’s been working in journalism since graduating with a bachelor’s degree nearly 20 years ago. Lewis said she deferred the loans several years hoping to catch-up with a higher-paying job but that hasn’t happened. She said her consolidated payment is nearly $400 per month just $200 less than her mortgage.

With a teenage son approaching 17, Lewis is now worried about being able to help with his higher-ed costs and helping him avoid her mistakes.

Financial experts warn that deferring loans or defaulting can dramatically add to the balance. Defaulting or delinquencies can add between 16% to 20% to the loan balance if it goes into collections.

One out of every five direct student loans are not paid on time, according to the College Board. Standard payments are fixed at $50, graduated payments increase over time. Extended payments can be fixed or graduated. Other rules of repayment include:
• Income based payments cap at 15% of income;
• Pay as you earn options cap at 10% of income;
• The income contingent adjusts for up to 25 years; and
• Income sensitive adjusts over 10 years.

Students graduating today who almost all qualify for a pay-as-you-go plan are still defaulting some three years out of school at rate of 13.7%, said Best.

The Institute for College Access and Success recently reported that average student debt has topped $30,000 per graduate in three states this year and six others are not far behind. The average debt nationwide in 2013 was $28,400, TICAS said, up 3% from the year before. The organization found that 69% of the 2013 college graduates left school with some debt.

"It's getting harder and harder to graduate from college without debt," said TICAS President Lauren Asher.

She said more students are borrowing more to keep up with rising tuition costs, noting that it’s unsustainable.

Another study by the Pew Research Center notes that new college graduates have borrowed twice the amount of graduates 20 years ago. That research found that students from affluent families were not exempt from carrying student loan debt.

Similarly, Pew notes there has been a sharper increase in student borrowing among graduates with more highly educated parents. In the class of 2011-2012, 61% of students whose parents also had graduated from college left school with some student debt. This represented a 50% increase compared with students from similar backgrounds who graduated 20 years earlier. The increase in borrowing among students whose parents have less education was significantly smaller, although those students remain more likely to borrow.