In a special election that was watched outside the city and state, Fayetteville voters repealed an ordinance approved earlier in 2014 by the city council designed to make it illegal to discriminate against an individual based on their sexual orientation.

Unofficial results from the Washington County Clerk’s office showed that 51.66% (7,523) voted for repeal of the controversial ordinance and 48.34% (7,040) voted against repeal.

The ordinance pitted the Fayetteville Chamber of Commerce against Fayetteville Mayor Lioneld Jordan and University of Arkansas Chancellor G. David Gearhart.

After the chamber board voted to support repeal of the ordinance, Chamber President and CEO Steve Clark said support of the repeal had nothing to do with being against the LGBT community and instead was standing against a law that he said was vague and non-specific in what constitutes discrimination.

"This is absolutely not a pro-LGBT vs. anti-LGBT debate, though that is how it is being framed," he said in a Nov. 10 memo. "The ordinance as it was drafted is unworkable and unacceptable. If we stand by and ignore the impact of the legal deficiencies in the ordinance, in the next few years our members will bear the burden of funding the inevitable litigation necessary to clarify, amend, or overturn the law as it has been passed."

Mayor Jordan called for the chamber to rescind its decision to support repeal. Jordan is an ex-officio member of the Chamber's board of directors, and said he was not notified of the meeting.

Gearhart said he too as an ex-officio member of the board was not advised of the chamber’s meeting to vote on supporting repeal. Gearhart, head of one of the largest employers in the city and county, said the vote should proceed without Chamber interference.

"Many people favor allowing the citizens of Fayetteville to decide the issue at the ballot box in December, rather than having pressure exerted by the Chamber," he wrote. "If, indeed, the law is vague and too broad, the court system of Arkansas will clarify the law in due course."

Ronnie Floyd, pastor of a Springdale church that is one of the largest in Northwest Arkansas, spoke out in recent days to urge Fayetteville voters to repeal the ordinance. In a Dec. 8 blog post, Floyd said the vote is also about protecting religious freedoms.

“This is the nation’s current battleground on which to stand for religious freedom. Fayetteville, please rise up and send a clear and compelling message to all those propagating this agenda – that the people of Fayetteville will stand up and protect our religious freedoms,” said Floyd, who is also serving as president of Southern Baptist Convention – a group which represents almost 16 million Baptist church members.

Kendra Johnson, director of Arkansas’ Human Rights Campaign affiliate, said the vote was disappointing but part of the effort to move the issue forward. The national HRC was a leader in raising money and campaigning to oppose repeal.

"Tonight's vote is a deeply disappointing reminder that equality doesn't always move forward in a straight line. Make no mistake about it, tonight's election results—and the repeal of this ordinance — will inflict direct harm on LGBT Arkansans, their families and their friends,” Johnson said in a statement. “But we remain convinced that the progress of fairness will continue despite this result. All Arkansans should have the legal right to live safely within their communities, homes and workplaces, and the day will come soon when LGBT young people will wake up in this state and enjoy true equality under the law. We'll keep up the fight until that dream is achieved.”

Earlier this year the Human Rights Campaign conducted the largest survey of LGBT (lesbian, gay, bi, trans-gendered) individuals in Arkansas' history. According to survey results, 25% of all respondents reported employment discrimination, while another 37% described harassment in the workplace. The report from HRC notes that 38% of LGBT households earning less than $45,000 annually have experienced workplace harassment, while 43% of respondents said they had been harassed at "public establishments."

There were few, if any, smiling faces in the room Tuesday night (Dec. 9) as Fort Smith city staffers and the city’s attorney explained to the Fort Smith Board of Directors more details on settlement with the Department of Justice that will cost the city at least $480 million by 2026 and potentially triple water and sewer bills for homeowners.

The costs are part of a possible agreement between the city of Fort Smith and the Department of Justice related to Clean Water Act violations with the city’s water and sewer system. The U.S. Environmental Protection Agency turned the matter over to the DOJ in 2006. Initial word was that a proposed consent order would cost about $205 million in capital improvement costs.

However, Tuesday’s presentation revealed estimated capital costs between 2015-2026 of $375 million – not including finance costs. Also, estimated operations and maintenance costs in the 2015-2026 period tally $104 million, including hiring up to 82 people to implement the plan and its various new programs.The city’s combined water and sewer operations now employs 196.

The Board is scheduled to vote Dec. 16 on the extensive and detailed settlement plan. (Link here for a PDF of the city’s presentation on some of the costs and actions required through the proposed consent order.)

BIG PICTURE COSTS, ACTIONS
Of the $375 million capital costs, 39% ($145 million) is for defect remediation, 17% ($63 million) for capacity remediation, 12% ($45 million) for pumping improvement and 10% ($37 million) for engineering and professional services. Treatment, capacity assessment and current projects are also included in the capital costs.

Of the $104 million in operations and maintenance costs, 26% ($27 million) is estimated for collection system maintenance and repairs, 23% ($24 million) for extra staff and management support, 13% ($14 million) for treatment and pumping maintenance, and 13% ($14 million) for information management. The remainder will cover project management, root removal and pre-treatment work.

While the proposed settlement between the city and the DOJ is complex, the primary purpose of action is to increase capacity to eliminate wet weather overflows and address remedial defects to eliminate dry weather overflows. The time frame outlined in the city's presentation of the proposed consent decree terms extend for 12 years, giving the city time to invest the needed funds to bring the sewer system up to standard.

Much of the city’s previous investments in the system have been to mitigate or eliminte wet weather overflows. The focus now appears to be toward doing the same for dry weather overflows. According to the proposal, the city will have to begin monitoring overflows in wet and dry weather situations and report all overflows to the Environmental Protection Agency. In addition, the assessments will focus on finding the dry weather blockages and intrusions in lines that cause overflows during dry periods. These can include grease blockages and roots that have grown into water lines over periods of years or decades. Testing private lines of residential and commercial users could involve smoke testing. There were some questions Tuesday about the legality of forcing property owners to submit to such tests. (At the end of this story is a short video explaining how a smoke test is conducted and problems discovered through smoke testing.)

DISCIPLINE NEEDED
Jerry Canfield, an attorney with Daily & Woods and the city’s lead attorney on the settlement effort, said he recommended the Board approve the settlement plan, and that if litigation ensues it could cost the city $1.5 million annually in legal fees and could result in civil penalties much higher than the $300,000 presently proposed. However, he cautioned that if the plan is approved, the Board and future Boards must have “the discipline to not be stalled ... by things that might come along.” He said the plan includes “multiple, multiple deadlines” with stiff penalties for missing them.

Water and sewer bills for Fort Smith residents could grow from an average of $40 per month to up to $120 by 2026. If a sales and use tax is implemented in 2020, the monthly rate may only increase to $103 by 2026.

“There’s not going to be much time for special treatment and delays,” Canfield said in explaining that allowing a few “squeaking wheel” voices to alter the plan or reduce needed rate increases would add to the costs.

Canfield freely noted he was tempted many times to walk away from negotiations with the DOJ and at times had a “strong desire to go tell them to fly a kite.” He said the “brinksmanship” of parts of the negotiations were “the most remarkable” in his more than 40 years of practicing law.

DIRECTOR REACTION
City Directors Keith Lau and Kevin Settle were pointed in their concerns with the plan. Lau said he had “heartburn” about hiring 82 people for a 12-year program. He also wanted more detail on how the money would be spent in the $375 million capital costs program.

“I need more convincing that that (capital cost budget estimate) is a good number,” Lau said in an interview after the meeting. “I just haven’t seen enough data to justify that and 82 more people.”

Settle asked Steve Parke, director of Fort Smith Utilities, to “make sure you justify” the need for each of the 82 positions.

Parke assured Settle that the city staff would return to the Board to have a “genuine conversation” about staffing and costs. But Parke added that the city’s utility department has always been a “reactionary” workforce with respect to system maintenance. They will need more people to get ahead of problems and stay ahead of them.

In a brief interview after the meeting, Parke said the settlement, if approved by the Board, asks the city to do a lot in just 12 years. When asked his confidence level of making it all happen in 12 years, Parke paused, and then said, “We will do it.”

The size of the Fort Smith metro workforce and the number of employed continues to decline year-over-year, but the number of unemployed in October fell more than 30% to 6,774, according to figures from the U.S. Bureau of Labor Statistics.

Fort Smith’s metro jobless rate fell to 5.4% in October compared to 5.7% in September. The rate was lower than the 7.5% in October 2013, but the number of employed in the region dipped slightly to 0.54% in the 12-month period.

October’s data is subject to revision in future reports from the U.S. Bureau of Labor Statistics.

The size of the Fort Smith regional workforce during October was 126,015, up from 125,985 during September, but below the 129,664 during October 2013. The labor force reached a revised high of 140,253 in June 2007, meaning the October workforce size is down 10.15% from the peak number.

The number of employed in the Fort Smith region totaled 119,241 in October, up from 118,771 in September, and just slightly below the 119,892 employed in October 2013. The number of employed in the metro area is down 10.19% compared to the high of 132,779 in November 2007 – or 13,538 fewer jobs in the almost seven-year period.

All of the eight metro areas in or connected to Arkansas had jobless rate declines in October compared to September, and all had jobless rate declines compared to October 2013. During October, the lowest metro jobless rate in the state was 3.9% in Northwest Arkansas and the highest rate was 7.5% in the Memphis-West Memphis area.

FORT SMITH METRO NUMBERS
Unemployed persons in the region totaled an estimated 6,774 during October, down from the 7,214 during September, and well below the 9,772 during October 2013.

The Fort Smith area manufacturing sector employed an estimated 17,800 in October, down from 17,900 in September, and below the 18,400 in October 2013. Sector employment is down 37.5% from a decade ago when October 2004 manufacturing employment in the metro area stood at 28,500. Annual average monthly employment in manufacturing has fallen from 28,900 in 2005, 19,200 in 2012, and to 18,300 in 2013.

Jobs in the Trade, Transportation and Utilities sector — the region’s largest job sector —  totaled 24,300 in October, down from 24,400 in September, and above the 24,000 during October 2013. Employment in the sector reached a high of 25,700 in December 2007.

Employment in the region’s tourism industry was 9,800 during October, down from 9,900 in September and above the 9,400 in October 2013. The sector reached an employment high of 9,900 in August and maintained that level in September.

In Education & Health Services, employment was 16,500 during October, unchanged compared to September and below the 16,600 during October 2013. Annual average monthly employment in the sector has steadily grown since 2005 when it reached 14,000. In 2012 the average was 17,000, but fell slightly to 16,800 in 2013. Employment in the sector reached a record 17,300 in October 2012.

In the Government sector, employment was 19,500 during October, up from 19,200 in September and above the 19,400 in October 2013.

NATIONAL NUMBERS
Unemployment rates were lower in October than a year earlier in 354 of the 372 metropolitan areas, higher in 14 areas, and unchanged in four areas, noted the broad BLS report.

The U.S. unemployment rate in October was 5.8%, down from 7% from a year earlier. Arkansas’ jobless rate was 6% in October, down from 6.2% in September and down from 7.6% in October 2013.

Oklahoma’s jobless rate during October was 4.5%, down from 4.7% in September, and down compared to 5.6% in October 2013. The Missouri jobless rate during October was 5.9%, down from 6.3% in September and below the 6.3% in October 2013.

ARKANSAS METRO AREAS
Fayetteville-Springdale-Rogers
Oct. 2014: 3.9%
Sept. 2014: 4.4%
Oct. 2013: 5.4%

Fort Smith
Oct. 2014: 5.4%
Sept. 2014: 5.7%
Oct. 2013: 7.5%

Hot Springs
Oct. 2014: 5.6%
Sept. 2014: 6.1%
Oct. 2013: 7.8%

Jonesboro
Oct. 2014: 4.8%
Sept. 2014: 5.2%
Oct. 2013: 6.6%

Little Rock-North Little Rock-Conway
Oct. 2014: 4.8%
Sept. 2014: 5.3%
Oct. 2013: 6.5%

Memphis-West Memphis
Oct. 2014: 7.5%
Sept. 2014: 7.9%
Oct. 2013: 9.2%

Pine Bluff
Oct. 2014: 6.8%
Sept. 2014: 7.5%
Oct. 2013: 9.7%

Texarkana
Oct. 2014: 5.5%
Sept. 2014: 5.8%
Oct. 2013: 7.2%

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

Consumers’ attitude toward debt creation is reaching new post recession heights as Americans are expected to rack up more than $60 billion in new credit card debt by the end of 2014, according to CardHub. This CardHub study also predicts consumer credit card debt will rise 55% over last year’s ending levels.

NerdWallet reports the average U.S. household credit card debt is $15,608 this holiday season. This statistic factors in only those households carrying debt. The U.S. household consumer debt profile also includes average mortgage debt of $154,847. That does not include the average student loan debt of $32,397.

While consumers are reaching for the plastic cards more this year, the combined revolving debt of $881.8 billion owed on credit cards is still lower than the $906.7 billion owed by consumers in 2010.

CardHub CEO Odysseas Papadimitriou said the study reveals good and bad news for consumers and the overall economy. He said consumer credit card debt statistics, which are an indicator of spending trends and household financial health, support the notion of a rapidly improving economy that is further evidenced by an unemployment rate hovering at 5.8% in November.

“The credit card charge-off rate, at 2.89%, is at the lowest point since 1985, you see, which indicates that consumers have the financial wherewithal to remain current on their obligations. That’s the good news,” Papadimitriou said.

He voiced concern that while spending habits may be sustainable for now, underlying attitudes toward debt have not improved since the Great Recession. He points to four consecutive quarters of declining credit card performance. 

“Consumers must strive to remember the corrosive impact of debt on household finances during the recession and work to get out from under its influence before the burden becomes unbearable again,” Papadimitriou said.

With stagnant income growth during a virtual zero interest rate climate, credit consultants worry that debt accumulated today maybe harder to pay-off if rates begin to rise. Credit card companies charged off $6.012 billion in the third quarter of 2014, which was 2.89% of its overall debt. 

CardHub projects that consumers will charge-off on $30.35 billion in credit card debt during 2014. If that projection holds true, consumers will have defaulted on nearly $300 billion ($298.5 billion) in credit card debt since 2009.

John Silvia, chief economist with Wells Fargo Securities, said consumers have been gradually adding to their debt levels in the past two years but that’s not a necessarily a bad thing as the consumer spending is still two-thirds of the nation’s Gross Domestic Product.

“We have recently seen growth in revolving credit increase, to cycle-highs in excess of 3% year-over-year, while consumer loans reported by the Fed’s report were up 3.8% in October. This is encouraging news for economic growth going forward, as the consumer seems to be getting more comfortable engaging in spending through borrowing, whether it be through credit-card use (revolving credit) or otherwise,” Silvia said.

He said consumer credit card spending has been responsive to changes in interest rates historically but that may not be the case if rates begin to rise. His own analysis using data back to 1994 show that for every 1% interest rates rise, consumer spending is reduced by 1.29%. Since 2009 the reduction has been just 0.44% which an indication that changes in monetary policy are not likely to have as large of an effect on the pace of consumer spending next year.

The Arkansas Department of Environmental Quality (ADEQ) has scheduled its first stakeholders’ meeting a week before Christmas to discuss drafting new ozone and particulate matter rules that meet federal Clean Air quality standards.

The meeting comes only weeks after Gov.-elect Asa Hutchinson and Attorney General Dustin McDaniel asked Environmental Protection Agency Chief Gina McCarthy to withdraw the agency’s proposed rules to cut the nation’s carbon emissions that threatens to shut down part of Arkansas’ coal-fired electric generation.

Although the ozone and carbon emissions are part of the same wide-ranging federal Clean Air Act, both are governed by a different set of standards and rules. The first meeting on the new ozone standards will take place at ADEQ’s Northshore headquarters in North Little Rock at 1 p.m. on Dec. 18, less than three weeks after the public comment period ended on the so-called “greenhouse gas” regulations.

ADEQ spokeswoman Katherine Benenati said stakeholders representing a variety of interested parties have been invited to the meeting, which is also open to the public. She said the ADEQ staff will present information on the national ambient air quality standards and the State Implementation Plan (SIP) process during the scheduled three-hour meeting.

SURPRISE EPA OZONE STANDARD
The holiday meeting was called in response to the EPA’s surprise announcement on the day before Thanksgiving to tighten the National Ambient Air Quality Standard (NAAQS) for ozone, raising the anger of the business lobby and Republican members of Congress who have questioned the timing of the federal guidelines.

Under the new proposal that the EPA says was based on “extensive recent scientific evidence” concerning the harmful effects of ground-level ozone, or smog, the Obama Administration has proposed to set the new standards within a range of 65 to 70 parts per billion (ppb), or possibly as low as 60 ppb.

“It empowers the American people with updated air quality information to protect our loved ones – because whether we work or play outdoors – we deserve to know the air we breathe is safe,” McCarthy said on Nov. 26. “Fulfilling the promise of the Clean Air Act has always been EPA’s responsibility. Our health protections have endured because they’re engineered to evolve, so that’s why we’re using the latest science to update air quality standards – to fulfill the law’s promise, and defend each and every person’s right to clean air.”

Under The Clean Air Act, the EPA must review ozone standards every five years by following a set of open, transparent steps and considering the advice of a panel of independent experts. EPA last updated these standards in 2008, setting them at 75 ppb.

This new proposal, however, is separate from the EPA’s carbon emission guidelines that Arkansas and other state must have in place by the summer of 2015. On Dec. 1, Gov.-elect Asa Hutchinson sent a letter to the EPA’s McCarthy urging the federal agency to postpone the president’s so-called “Clear Power Plan,” which proposes a 30% reduction in carbon dioxide emissions from existing power plants by 2030 from 2005 levels.

Under Gov. Mike Beebe, the ADEQ and state Public Service Commission brought together about 20 stakeholder groups representing utilities, state agencies, environmental advocates, energy efficiency experts, consumers and other interested parties to discuss the EPA’s proposed “dirty air” guidelines announced in June.
Benenati said no future stakeholder meetings have been scheduled to discuss carbon emissions guidelines for Arkansas. Hutchinson’s office has also not indicated if his administration plans to continue stakeholder meetings on the “dirty air” rules once he takes over as governor.

EPA PUSHES FOR URBAN AIR QUALITY
According to the EPA, the benefits of meeting the proposed ozone standards will significantly outweigh the costs. The federal agency estimates that the “large health benefits” to be gained by avoiding asthma attacks, heart attacks, missed school days and premature deaths are valued at $6.4 to $13 billion annually in 2025 for a standard of 70 ppb, and $19 to $38 billion annually in 2025 for a standard of 65 ppb. Annual costs are estimated at $3.9 billion in 2025 for a standard of 70 ppb, and $15 billion for a standard at 65 ppb.

In addition, the EPA said that federal programs to reduce air pollution from fuels, vehicles and engines of all sizes, power plants and other industries shows that the vast majority of U.S. counties with monitors would meet the more protective standards by 2025 with the current rules now in place or underway.

Nationally, from 1980 to 2013, average ozone levels have fallen 33%, the EPA said, adding that it projects this progress will continue. Still, Republican lawmakers, state regulators and industry groups are displeased not only at the timing of the new ozone proposal, but add that the new rules are just as burdensome as the EPA’s sister guidelines on carbon emissions.

In fact, ADEQ’s counterparts at the Texas Commission on Environmental Quality (ATEQ) say the new rules will increase cost to industry and consumers and offer no significant health benefits.

“First, I find it offensive for EPA to make this announcement the day before Thanksgiving without giving the TCEQ, one of the largest environmental agencies in the world, a courtesy call to alert us it was coming,” said TCEQ Commissioner Toby Baker. “Second, if the EPA is proposing new standards based on the best available science, as Administrator McCarthy claims, wouldn’t they propose a single new standard based on that science that is most protective of public health?”

“Unfortunately this appears to be a unilateral lowering of standards for the sake of lowering standards,” added TCEQ Commissioner Zak Covar.

According to the ADEQ, new guidelines for particulate matter up to 2.5 micrograms in size are being added to the state air pollution control regulations in order to comply with federal ozone standards. The six most common pollutants under the EPA’s ambient air quality standards include particulate matter, ground-level ozone, carbon monoxide, nitrogen dioxide, sulfur dioxide and lead.

The EPA will seek public comment on the proposal for 90 days following publication in the Federal Register, and the agency plans to hold three public hearings. The federal agency plans to issue final ozone standards by Oct. 1, 2015.

Know who is probably busier than Santa’s elves? The office movers at the corporate headquarters of Wal-Mart Stores.

Wal-Mart Stores announced that Judith McKenna will replace Gisel Ruiz as chief operating officer for Walmart U.S. reporting directly to CEO Greg Foran. Ruiz has been reassigned as executive vice president of Wal-Mart’s International People Division.

The moves come as no surprise to analysts given the previous turnover at the top since new CEO Doug McMillion took the helm earlier this year. His choice of Foran to replace Bill Simon as head of the retailer’s flagship U.S. division did come as a surprise and has since fostered the exit of Duncan Mac Naughton, the chief merchandising officer for U.S. stores.

Ruiz worked in tandem with Mac Naughton, but it looks as if the U.S. team will now be overseen directly by Foran and McKenna. Both are new the U.S. team after serving in similar roles abroad.

“One of the great things about Wal-Mart is the depth and breadth of talent at all levels of our organization. Around the globe, we have some of the best leaders in retail because of our focus on developing talent and our commitment to creating opportunities for diverse experiences,” Foran said in a statement. “The announcements we’re making today are examples of just that.”

McKenna joined Wal-Mart nearly 20 years ago as part of its Asda (United Kingdom) leadership team where she served as the chief financial officer and chief operating officer. She moved to Walmart International as executive vice president of strategy and international development, and most recently served as chief development officer for Walmart U.S.  

She and Foran previously worked together on Wal-Mart’s international stage, but in this new role McKenna will lead a team of 1.3 million employees. The retailer said she will also continue to lead Wal-Mart’s small format stores, development of new formats, expansion of Walmart services and the integration of digital commerce into the retailer’s existing U.S. stores.

“At her core and by experience, Judith is a retailer who has made major contributions to our business throughout her career,” Foran said. “It’s exciting to bring her skills in managing store operations, small format growth, logistics and e-commerce to an expanded role in our U.S. operations. Her knowledge of global best practices and her success in leading our associates around the world will help drive our Walmart U.S. business forward.”

Foran, under the direct instruction of McMillion, has vowed to grow U.S. sales with more attention to underperforming supercenters, expanding fresh categories, adding private label brands where their are niche opportunities and reining in inventories and operational costs where possible. 

“McKenna clearly has the experience to hit the ground running as chief operating officer and it’s great to see that Wal-Mart has executed another well-deserved promotion of a female retail leader. The move also underscores the value that Wal-Mart continues to place on international experience and the multi-format focus that is inherent with it,” said Carol Spieckerman, CEO of newmarketbuilders.

“Walmart made a smart move by elevating McKenna. She has proved her loyalty and leadership and stayed ahead of change through multiple transitions, acquisitions and during a time of unprecedented retail change. Greg Foran, Doug McMillon and Judith McKenna exemplify the type of straightforward, bluster-free leadership that Wal-Mart, and all of retail, needs right now. I’m expecting great things,” Spieckerman added.

McKenna and Foran are each experienced merchants and operators by trade and having worked across international platforms will no doubt bring different ideas to the table.

“Wal-Mart knows it needs to make some changes in its U.S. division because the era of the supercenter growth has slowed. These changes require increased flexibility. I think this new blood and leaner management team facilitate Wal-Mart’s experimentation with more formats and new shopping channels,” said Alan Ellstrand, corporate management expert and professor at the University of Arkansas.

He said Wal-Mart’s corporate flowchart is more complicated than most other companies having become somewhat bloated in recent years. Ellstrand gives McMillon a nod of approval in trying to simplify the management tree. Ellstrand also said the recent management promotions could have long-term significance given that McMillion is the youngest CEO to run Wal-Mart since Sam Walton.

Given that McMillon’s directive is to turn the U.S. ship around to higher profits, he’s put together his chosen team for this task. Ellstrand said if this blended international team of U.S. executives is successful in that endeavor there will likely be CEO jobs waiting for them somewhere in the world of retail if they want to move up the career ladder.

PEOPLE DIVISION
McKenna is replacing chief operating officer Gisel Ruiz who helped open 400 new U.S. stores since February 2012. Ruiz was sent back to the retailer’s human resource division retaining her title of executive vice president.

Ruiz began her career out of college in the retailer’s management trainee program. She is daughter of uneducated immigrant parents who were each business entrepreneurs. Before being appointed chief operating officer in early 2012, Ruiz served as executive vice president of Walmart’s U.S.People Division. This time around she will head up the retailer’s international people leadership team reporting directly to international CEO David Cheesewright.

“Gisel is an inspirational leader who has consistently contributed to Wal-Mart’s growth and success throughout her 22 years with the company. Her proven track record and unwavering commitment to our associates make her the perfect choice for this new role,” said Cheesewright. 

MINIMUM WAGE DEBATE
Speaking of people, one of the more common complaints against Wal-Mart is that the retail giant owned by the world’s richest family (Sam Walton’s heirs) pays its store workers too little.

Wal-Mart said that of its 1.3 million U.S. workers, roughly 6,000 earn the federal minimum wage. In an recent interview with CBS’s Charlie Rose, Wal-Mart CEO Doug McMillon said he’s going to fix that.

"We're gonna make some changes in a few months that will create a situation where no Wal-Mart associate in the United States makes federal minimum wage. We'll be ahead of that with our starting wage," he said.

Rose asked McMillon if there was a difference between the public perception of Wal-Mart and the reality of Wal-Mart.

"In the world there is a debate over inequity, and sometimes we get caught up in that and retail does in general. But we couldn't run a good business if we don't take care of people and have compensation plans that work," McMillon answered in the interview.

Tyson Foods execs were seen on Wall Street Wednesday (Dec. 10) in business suits rather than their signature khaki. The Springdale-based execs gathered for an investor conference in Manhattan and CEO Donnie Smith made an appearance on CNBC’s Closing Bell Segment.

Board Chairman John Tyson, Smith and other top executives spent the day talking up the company’s future following the recent $8.5 billion acquisition of Hillshire Brands.

"This is an exciting time as we integrate Hillshire Brands into Tyson Foods and we have set higher expectations for growth," Smith said in his opening remarks. "The depth and breadth of our portfolio, our continued growth in value-added poultry and prepared foods, our well-positioned brands, our category leadership and the synergies we're capturing are unlinking us from the volatility of the commodity markets."

EXPECTED SYNERGIES
The company again outlined more details on the $500 million in synergies it expects to glean by 2017 from its marriage to Hillshire Brands. The first $200 million in synergies is expected in 2015.

Donnie King, president of Tyson’s North American Operations, placed the synergies into four buckets. The bulk of the savings will be felt in the company’s prepared foods segment — $140 million in 2015 and $250 million by 2017.

He said combined procurement of raw materials will generate $40 million in savings in 2015 and $175 million over the next two years. Synergies in manufacturing processes and logistics will generate $25 million this coming year and double to $50 million by 2017.

Lastly, King said organizational and fiduciary savings on the pro forma company are expected to be $20 million in 2015 and $25 million by 2017.

He said managing this massive amount of savings is nothing new for a company of Tyson’s scale. During periods of volatile grain prices he said it was common for Tyson Foods to offset $10 million a week in expenses.

OUTLOOK CONFIRMED
Smith said the outlook for Tyson Foods is bright given that it now has the No. 1 brand in breakfast sausage, fresh chicken, frozen, fully-cooked chicken, frozen breakfasts, smoked sausage, hot dogs, corndogs and super premium sausage.

The so-called “Tyson 2.0” projects $42 billion in annual sales in 2015 with adjusted earnings for the year in the range of $3.30 to 3.40 per share. This represents an increase of at least 12% compared to fiscal 2014. He said the added money in consumer’s wallets from gas savings are likely to boost restaurant sales which is a plus for Tyson’s foodservice business.

"We believe we are your best investment opportunity in food because we have all the tools in the toolbox to continue our growth, and everything we do is focused on consistent earnings growth over time," Smith said.

Chairman John Tyson also announced that Smith has been named to the company's board of directors.

"Donnie's election to our board not only cements the already strong alignment between the board and our senior management, but demonstrates our shared commitment to a strategic business plan designed to continue delivering impressive growth," Tyson said.

CORPORATE IMAGE
Sara Lilygren, vice president of corporate affairs at Tyson Foods, was a featured speaker at Wednesday’s Investor Conference. She spoke about the meat giant’s mission to protect its corporate reputation saying that future growth depends on it. She said companies are no longer viewed though a soft lens, but gritty details and greater clarity is what the public expects.

“Communication management is an important function today, perhaps more than ever before. We take this responsibility seriously — defending and enhancing our company’s reputation. Everybody has a microphone, camera and access to a website,” Lilygren said. “We are trying to meet the public’s expectation with the use of social media to tell our own story. We are also monitoring 24 / 7 all the things said about Tyson Foods on social media feeds and separating the relevant chatter from the non-meaningful noise.”

Lilygren said Tyson has been proactive in its advocacy for animal welfare with its FarmCheck program which uses a third party service to visit grower farms to check for approved animal welfare practices. 

She said Tyson has also instituted a “no antibiotics, ever” program for chicken it produces. This was the result from customer pressure for antibiotic free chicken. When referring to the controversial GMO issue, Lilygren said Tyson has not been as vocal, but she expects that to change in the near future.

The number of new foreclosure filings across the state remain low with 69 new defaults and 166 homes taken back by lenders in November, according to Irvine, Calif.,-based RealtyTrac. The foreclosure pace slowed 49% from the same month last year and fell 69% from October’s report.

Arkansas is one of several states that continues to see its housing markets improve, but experts said finding a new equilibrium is ongoing for much of the country.

“The housing market is struggling to find the new normal when it comes to a tolerable level of foreclosure activity in this post-Great Recession economy,” said Daren Blomquist, vice president at RealtyTrac. “Finding that new normal requires striking a balance between too much loan risk, which would result in another housing meltdown, and too little risk, which could result in a stunted recovery.”

LOCAL UPDATE
There were 237 foreclosure listings in the four counties of Benton, Washington, Crawford and Sebastian as of Dec. 11, according to Jim Long, agent with Crye-Leike Real Estate. That number is up from 192 listings over the past two months, but still well below the 360 listings reported a year ago.

The regional housing markets of Northwest Arkansas and the Fort Smith metro area reported similar foreclosure results in November.

Benton County reported 2 new defaults in November, with 15 homes going back to lenders for a total of 17 new filings. This rate is down 73% from a year ago, according to RealtyTrac data. In Washington County there were 4 loan defaults recorded in November and 2 homes recovered by lenders for a total of 6 new filings. The filing rate fell 76% from November 2013.

Sebastian County’s population of 125,795 reported just 1 new default and two other homes taken back in foreclosure in November. These 3 new filings represent an 82% decline from the same month last year. Crawford County reported 1 new default with four other homes secured by lenders through the foreclosure process in November for a total of 5 new filings. Foreclosure filings were down 85% from the prior month and 82% lower than in the year-ago period, according to RealtyTrac.

NATIONAL NUMBERS
Nationwide there were 112,498 U.S. properties in foreclosure last month, which was just a 1% decline from last year. That equates to one in every 1,170 households, and marks the 50th straight month of year-over-year declines, RealtyTrac reported.

Blomquist said some markets have started to see an uptick in foreclosure activity from loans originated earlier in 2014, which indicates some lenders are open to a slightly higher level of risk than seen in the past five years of extremely tight lending standards.

“But it’s unlikely that lenders will dial up that risk level too quickly going forward given that many are still dealing with working through a lengthy and messy foreclosure process on risky loans from the last loose lending spree,” he added.

Also this week, TransUnion forecast that the national mortgage delinquency rate will be 2.51% in 2015, the lowest level since the start of the recession in late 2007. They expect the rate to decline to 3.21% by the close of this year.

“We expect the national mortgage loan delinquency rate to continue its decline throughout 2015, marking four consecutive years of quarterly decreases,” said Steve Chaouki, head of financial services for TransUnion. “We anticipate interest rates to remain relatively low next year and unemployment rates to continue their decline, both of which should help fuel home sales and improve consumers’ ability to pay. Foreclosures are also expected to continue to funnel through the legal system in 2015, which will reduce delinquencies that have been lingering for some time. All of these factors will contribute to a further decline in mortgage delinquencies.”

Mortgage lenders continue to work with delinquent homeowners to avoid foreclosure when possible. Freddie Mac said it has provided workout options that have prevented more than 1 million foreclosures since 2009. Fannie Mae said its workout loan solutions have helped more than 1.6 million homeowners avoid foreclosure.
Another federal program — Hope Now — has provided 468,000 homeowners with non-foreclosure solutions in the third quarter of this year. During this period foreclosure starts rose 6% and foreclosure sales declined 6% from the year-ago period.

Foreclosure sales totaled approximately 108,000 for the quarter, the lowest quarterly total for foreclosure sales recorded since Hope Now began tracking loan data in 2007. Hope Now also reported that mortgage delinquencies of 60-days or more totaled 1.89 million as of Oct. 30, a decline of 10% from a year ago.

There are more than $1.7 trillion reasons why food companies, retailers and consumer product goods suppliers are focusing on the Hispanic population. Hispanics
account for one-sixth of the U.S. population, totaling 53 million people who have increased their spending by more than 200% since 2000. 

A new report by Information Resources Inc. (IRI) projects Hispanic purchasing power will surpass $1.7 trillion in the next two years. In 2015 spending among Latinos is projected to reach $1.5 trillion.

While this growing demographic is diverse there are some commonalities such as the proliferation of smart phones and their use of social and mobile communication platforms that impact their path to purchase. Keeping tabs on their spending habits should be a priority for consumer packaged goods (CPG) companies.

“Aligning a service and market offering with the needs of Hispanic shoppers is rapidly becoming a critical success factor for sustained CPG and retail growth,” said Staci Covkin, principal at IRI. “Recent IRI research has demonstrated that improved insights and activation of these shoppers can result in significant sales and market share uplift.”

She said a typical CPG company with $1 billion in sales can earn an additional $71 million in incremental revenue through effective Hispanic marketing.

HISPANIC MARKET SEGMENTS
IRI classifies Hispanic consumers in three distinct categories:
• Acculturated Hispanics
With a median income of $62,000, these shoppers are familiar with American culture and language and tend to be more optimistic about the future. When shopping, acculturated Hispanics frequently want the best price or deal and are willing to compromise on product quality to some extent. They also tend to be more digitally savvy and concerned with their physical appearance than non-Hispanics.

• Bicultural Hispanics
While shoppers in this segment are bilingual, they choose to follow Hispanic traditions and are more inclined to buy products that are specifically marketed to Hispanics. As shoppers, bicultural Hispanics are also the most digitally savvy of all groups, are most likely to try new things, and are heavy consumers of both English- and Spanish-language media.

• Unacculturated Hispanics
With more limited knowledge of English, shoppers in this segment rely on Spanish translations on packaging and buy products specifically marketed to them. Though money is often tight for many unacculturated Hispanics, they are passionate about eating healthy foods and cooking fresh and traditional meals. Shoppers in this segment are also most likely to listen and be influenced by advertising before buying a product.

Another reason food companies and CPG firms are interested in Food Hispanic shoppers is that they tend to make more frequent trips to the grocery store and spend more per month on food than the general population.

Retailers and CPG manufacturers who haven't targeted the Hispanic population yet will likely do so in the future as the market represents a bright spot amid intense competition.

"If you look at most retailers across the U.S., their growth is pretty flat. As they're looking at sources of growth, the Hispanic market is an opportunity," noted Colin Stewart, a senior vice president at AMG Strategic Advisors, a unit of Acosta Sales & Marketing.

BIGGER SPENDERS
Hispanics have an average shopping budget of $425 per month, compared with $416 for the overall U.S. population, according to a report by AMG Strategic Advisors and Univision Communications.

"When you start looking at some of the details, they are even more valuable" to retailers, according to Elena Etcharren, senior vice president at AMG Strategic Advisors.

She said Hispanics spend more on routine and stock-up trips to the grocery store partly because they tend to have larger households than the general population. Hispanics also often bring their children when they shop, and they often influence purchase decisions.

Wal-Mart has long targeted the Hispanic shopper. Some of the efforts have paid off and others not so much. Liz Sanderson of Univision Communications noted in the report that Wal-Mart targets Hispanic shoppers with layouts designed to make them feel welcome, such as a display of mangoes or Hispanic heritage products at the entrance to the grocery department.

"I mention Wal-Mart because they're not traditionally a Hispanic retailer, but they're doing a great job of delighting Hispanics," she noted. Sanderson also credits H-E-B in south Texas for its focus on Hispanic products.

While Wal-Mart was singled out by Sanderson in the report, the retail giant recently shuttered its Supermercado de Mexico store in Houston after just five years in operation. Wal-Mart said it will “incorporate some things learned from the Supermercado test” into existing stores, such as the Walmart Neighborhood Market.

“We’re constantly testing new ideas and concepts with our customers. We think we can really serve customers with existing stores,” according to spokeswoman Betsy Harden.

Sanderson said Hispanics consume more beverages than the overall U.S. population, and they're more likely to select tropical flavors, such as passion fruit, mango or tamarind, she said. But they also like the new flavored waters and energy drinks.
Hispanics also buy more health and beauty products, fragrances, cosmetics and baby care products than the general population. 

"Hispanics tend to be very sensorial. They like to pick up the product. They like to pick up the fruit and smell the fruit. They're very exploratory," Sanderson said in the report. 

“While Hispanics have been price conscious since the recession, often choosing house brands over national ones, the research indicates 39% of Hispanic consumers are likely to switch back to national brands when the economy improves and their budgets expand,” she added.

The term “eat more chicken” is likely to become more than just a Chick-fil-A slogan, as the poultry industry hopes to fill the protein gap created by shrinking beef supplies and limited growth in chicken production heading into 2015.

Executives with Tyson Foods said Wednesday (Dec. 11) at an investor conference in New York that the chicken industry is nearly maxed out in terms of production capacity heading into 2015 while at the same time that there is an expected 3% uptick in demand. Those factors could boost chicken prices and margins for Tyson Foods and other poultry processors.

Donnie King, president of Tyson Foods North American operations, said production sits at roughly 94% capacity — which is full. To meet the anticipated demand in early 2015 King said 2,000 more chicken houses would have to built now, which he said is not a feasible supply solution.

Bernie Adcock, head of supply chain operations for Tyson Foods, said there is a maximum 2.5% gain possible in poultry production slated for the first half of 2015, which is constrained by breeding stock age in small birds – one of the fastest growing and most profitable of segments within the chicken business.

“We are going to need more chicken meat. You can’t get more out of the current capacity and it takes time to build more chicken houses,” King said.

Analysts aren’t totally convinced the supply will be short because historically the poultry industry ramps up production in times of higher profits which eventually creates a supply glut and results in falling prices and profits.

Poultry execs said this time is different because of the “halo-effect” in the chicken segment resulting from a drastically shrinking beef supply. Tyson Foods CEO Donnie Smith said there is a fundamental shift by the consumer with respect to choosing chicken instead of beef.

Rob Moskow, analyst with Credit Suisse, is one of those market watchers who has doubts about Tyson’s analysis.

“We continue to harbor concerns that Tyson's competitors are going to do whatever they can to take advantage of the favorable environment by increasing production as they have in just about every chicken cycle historically, “ Moskow noted. “By our math, the supply growth could easily exceed this pace of demand if egg set growth stays at 3% and yield improvements continue to add extra weight to chickens.”

SMALL BIRD CONSTRAINTS
Tyson management said its foodservice customers want and need to be able to promote chicken in 2015, something they could not do in 2014 because of a shortage in small bird capacity stemming from older breeder stock and less favorable hatching results. The small bird business predominantly sends products to foodservice for rotisserie chicken or fried chicken products.

Noel White, the head of Tyson Foods chicken business, said foodservice contracting began earlier and concluded much earlier this year as customers were trying to lock down supplies for 2015.

“It wasn’t about the price as much as it was about securing their supply given the tighter supply in small bird production,” White said.

He said Tyson’s chicken business includes four distinct categories:
• Tray pack, fresh chicken for retail;
• Big bird, used for bone out products;
• Small bird, used in foodservice for rotisserie or to be cut for fried chicken; and
• Retail, fully cooked or value added products.

White said supplies will be short of demand in small bird, and growing more large birds doesn’t fix that.

Tyson competitor Pilgrim’s Pride also recently shared similar sentiment about the industry’s supply and demand issues. In a recent earnings call, Pilgrim’s Pride CEO Bill Lovette downplayed concerns that the friendly business climate for chicken would lead the industry to flood the market and create a supply glut and depress poultry prices.

While the industry looks set to increase production of large birds, Lovette said fewer smaller chickens may be raised, and many eggs are being sent to Mexico to be hatched. He also expects U.S. poultry exports to rise 2% next year.

“We have seen both food service and retail operators wanting more chicken across the whole spectrum of products we supply, both on the large bird for deboning segment, and especially on the small bird segment that goes either into the Q.S.R. (quick service restaurant) fried chicken restaurant industry or the supermarket deli,” Lovette said. “Supplies remain very tight. We don’t see that changing in 2015, even though there could be up to a 3% increase, and we think that is back half loaded.”

Smith told investors at Thursday’s conference that it looks like the increase in broiler meat on the market would appear at about mid-summer around July 4. 

“Before that, it's just physically impossible to get a whole lot more supply on this market,” Smith said.

BUY VERSUS GROW
Tyson execs reiterated that the company will remain one bird short of demand with its buy-versus-grow strategy in 2015. 

“Make no mistake we can grow birds as good or better than anyone else, but that isn’t our aim. We are focused on selling more valued-added chicken and we won’t end up with excess raw materials in the process,” King said.

Adcock asked analysts not to get caught up in the transactional purchases, but to think of it as an overall strategy that Tyson is using to match the supply with the demand it sees from its customers.

White said in the fourth quarter of 2014, Tyson purchased 100 loads of chicken parts per week which is equal to roughly 4 million pounds. He said the company buys parts on the commodity market to fill certain value-added orders which can be sold at a higher margin.

“It a spread business much like our beef and pork units ... Bigger demand is going to mean we likely buy more chicken,” King said.

Tyson Foods is adding additional processing capacity for its tray pack fresh retail business, which is one of the uses for the chicken it buys on the open market. King said the tray pack fresh business is one of the fastest growing and most profitable segments within its chicken business.

Tyson management held firm to the 2015 chicken margin guidance of 10% or better because of relative grain price certainty, the benefits from capital investments made in the last few years and the ongoing impact on chicken demand from rising beef prices. The company expects a similar environment in 2016 as chicken consumption increases another 3%.

Democratic Arkansas Governor Mike Beebe spent an hour on stage recently with political columnist John Brummett to discuss the outgoing governor’s political career, legacy and plans for retirement.

The event, which was held for the Little Rock nonprofit LifeQuest, was recorded for the weekend edition of Talk Business & Politics, which will airs on KATV Ch. 7 out of Little Rock.

Beebe and Brummett discussed a variety of personal, professional and political topics in a casual, comfortable one-on-one setting before a live audience that was ripe with mutual ribbing, serious reflection and the interjection of laughter from a crowd of more than 175.

Brummett is a political columnist with the Arkansas Democrat-Gazette and is a contributor to Talk Business & Politics.

ACCOMPLISHMENTS & OBSERVATIONS
The governor analyzed what he thought occurred in recent election cycles that have bolstered Republican elected officials up and down the ballot despite his own popularity. He said that political moods swing back-and-forth and that Republicans must prove they can govern capably to continue to earn voters’ trusts.

He said he hoped to help Democrats rebuild the party in Arkansas after the losses incurred in 2010, 2012 and 2014 – momentum he said was largely caused by the unfavorable view of President Barack Obama. Beebe warned that if Republicans swung too far from the mainstream with its governing style, namely referring to Tea Party supporters, voters would reassess their recent endorsements of the GOP.

Beebe named two accomplishments of his time as Governor that he hoped would be transformational and long-lasting. One was the Payment Reform Initiative that he sees as bending the cost curve on health care costs through a episodic care model versus a fee-for-service model. He also said he wanted Arkansas to have a higher self-esteem through his leadership – a “swagger” that would reflect a can-do mindset for the state.

“Not a negative Texas one (swagger), but a good positive one,” Beebe said.

Beebe also admitted failure – and regret – on one major issue: an industrial hog farm that was permitted in the Buffalo River watershed in Newton County. The controversial Concentrated Animal Farming Operation (CAFO) was permitted through the Arkansas Department of Environmental Quality and opened for business nearly two years ago despite legal challenges.

Critics say the waste from the plant will pollute the Buffalo River, while supporters contend there is a system in place to protect waste from leeching into the stream. Brummett said a voter he spoke to in Northwest Arkansas said the hog farm and its potential negative impact on the environment would be a part of the governor’s “place in history.”

“[This man said] you were asleep at the switch. Your whole administration let that happen. Was there something you and your administration could have done?” Brummett asked.

“Could I have raised the alarm earlier? Yes. You’re absolutely right,” Beebe answered. “Was someone asleep because we didn’t? The answer is, ‘Yes’ because I didn’t know about it.”

“Who’s supposed to tell you?” asked Brummett.

“It’s my fault. It’s my fault. If my people – whether they’re agency heads or agency personnel, or even my own staff – if I don’t know it, it’s still my fault,” said Beebe.

He added, “I wish it was never there. I’ve stopped all future ones. We have put all sorts of stuff from the University of Arkansas to monitor, and at the first opportunity that it looks like there’s leeching in that Buffalo watershed, we will take the appropriate steps to stop it. We have followed the law. I don’t really like the law. I think they ought to change the law, so that CAFO’s don’t exist anywhere around a watershed going forward and we’re going to do the best we can to make a better situation out of a bad situation. If I had it to do over, it wouldn’t happen.”

Beebe also said that he would have fought the Hempstead County-based Turk power plant – a clean coal plant – but said it was too far along in the building process to reverse course when he became governor.

“Natural gas is much cleaner, and we’ve got a lot of it,” said Beebe. “I wish the plant (Turk) was there – I wish it was a natural gas plant.”

RETIREMENT
When he leaves office in January, Beebe will have wrapped up a political career that began in 1981. He has served as a State Senator, Attorney General and Governor.

As he has repeated many times, he said running for elected office is not in his future political plans. But Beebe hasn’t announced what he may do besides play golf, read and stay out of his wife’s way when the first couple return to their hometown of Searcy.

“I don’t have any immediate plans to do anything. I am open to some things,” he said, admitting he may get bored. “There are just so many rounds of golf you can play and there’s only so many books you can read… I’ve conjured in my mind some options – none of which are full time. I’ve said I may serve on a board or two. I’ve said I may teach a college course. I may consult, but not as a lobbyist because I don’t want to do any of that stuff.”

“I don’t plan on doing anything full-time. I plan on letting it evolve. I plan on taking it easy and see what happens. If I get too bored, we’ll go figure out something. We’ll go tear something up and try to fix it,” Beebe added.

The planned Arkansas College of Osteopathic Medicine at Chaffee Crossing in Fort Smith remains on track for a fall 2016 opening, but the application by NYiT for an osteopathic college at Arkansas State University in Jonesboro has been denied.

The NYiT College of Osteopathic Medicine had applied for an “Additional Location” request with the Commission on Osteopathic College Accreditation (COCA) for the Jonesboro campus. COCA sent a letter to NYiT on Sept. 22, informing them the request was denied. Notice of the denial was made in a Dec. 15 letter from the Arkansas Osteopathic Medical Association to its members.

The City Wire contacted Konrad Miskowicz-Retz, associate vice president of accreditation for COCA, to learn why the request was denied. The only response from COCA was to confirm the request had been denied.

In July, the Arkansas Higher Education Coordinating Board granted NYiT certification for three degrees to be offered at the Jonesboro location. At the time, NYiT said it would invest $6 million in the Jonesboro operation, and ASU planned to invest $4 million.

“Collaborating with a nationally respected, well-established osteopathic medical school and dozens of partners in the mid-South medical community will enable us to address the shortage of primary care physicians in the underserved Delta,” ASU Chancellor Dr. Tim Hudson said in a statement.

The Arkansas Osteopathic Medical Association (AOMA) did not endorse the NYiT effort to locate a campus in Jonesboro. Among several objections, the AOMA did not believe physicians trained in Jonesboro would remain in Arkansas because the NYiT residency programs are not in Arkansas. The 10 categories reviewed by COCA for an additional location includes “a letter of comment” from a state association. (Link here for the official accreditation standards and procedures.)

“The AOMA supports the responsible growth of the osteopathic profession and thereby respects the decision of the COCA to deny NYIT of their substantive change request,” noted a statement from AOMA sent to The City Wire. “Our association supports and endorses organizations who adhere to the COCA's College of Osteopathic Medicine (COM) Accreditation Standards and Procedures.”

Despite the September denial, ASU officials believe the process is on track for a fall 2016 opening.

“The quest for a College of Osteopathic Medicine is on schedule,” Hudson wrote in a letter dated Nov. 21, almost two months after COCA notified the parties that the application for the Jonesboro campus was denied.

In the same letter, Hudson said he appreciated the work of NYiT to open the school for students in the fall of 2016. The September rejection does make a fall 2016 opening more difficult based on the procedural time required by COCA.

‘MISLEADING’ AOMA STATEMENT
Jeff Hankins, vice president for strategic communications and economic development for ASU, said the AOMA is “misleading” in its portrayal of the application denial. Hankins issued this statement to The City Wire when asked about the denial and Hudson’s belief that the accreditation process is on track: “The e-mail distributed today by the Arkansas Osteopathic Medical Association concerning the status of NYIT’s partnership with Arkansas State to develop an additional osteopathic medical school in Jonesboro is misleading and without context regarding the complex accreditation process.

“Frankly, we are disappointed that the AOMA is attempting to politicize the accreditation process and that the organization never contacted us for clarification on our standing. In fact, the AOMA has never provided our partnership’s efforts to advance osteopathic medical education in Arkansas any assistance, refusing at times to answer basic questions regarding procedure or to engage in dialogue with principals guiding the process.

“As is common with these types of applications, our initial petition resulted in a denial by the Commission on Osteopathic College Accreditation with a clear description of the additional information they require. We look forward to our next presentation to the COCA on April 18 when we will provide this information.

“We remain confident that NYIT-COM’s additional site on the Arkansas State University campus will be approved, and we continue to anticipate a fall 2016 opening. Dr. Barbara Ross-Lee of NYIT will be establishing an office on the A-State campus in January to continue ongoing planning.”

The AOMA rejected Hankin’s claims of politicizing the process or attempting to mislead. The AOMA issued this statement: “(T)he AOMA's intent was to address queries regarding information that concerns the osteopathic profession in Arkansas. The AOMA reported the news given to us and stated the facts accordingly and accurately. The AOMA has made no attempt to discredit NYIT-COM or ASU, and are deeply saddened by ASU's VP for Strategic Communications erroneous comments about means for keeping interested parties informed with accurate information.

“Our information can be validated by the national accrediting agency - COCA. Members of our organization found it misleading when information regarding COCA's action to deny NYIT was not effectively communicated to them by NYIT or ASU following the initial decision or their lack of filing an appeal of the decision. With regards to Mr. Hankins statements about our association's lack of support or communication with their project: We again are saddened by these statements. As Mr. Hankins well knows, for numerous years prior to NYIT's involvement, the AOMA met with and attempted to aid ASU in their efforts to establish a school of their own. Our association has appropriately documented every meeting with their institution and its leaders.”

OSTEOPATHIC COLLEGE IN FORT SMITH
The process seems smoother in Fort Smith. Kyle Parker, president and CEO of the Arkansas College of Osteopathic Medicine, said dirt is literally being moved to prepare for the planned fall 2016 opening with a first cohort of 150 students.

The new osteopathic school will be housed in a three story, 100,000-square-foot building valued at more than $31 million.

A fully operational osteopathic college is expected to serve about 600 students, and employ around 65 (full-time equivalent jobs) with an average salary of $103,000. That impact does not include adjunct professors that will be needed for the school. The school is located on Chaffee Crossing land (200 acres) donated by the Fort Chaffee Redevelopment Authority.

Parker said construction pads are finished on 27 acres, and $32.5 million has been placed in escrow as part of the COCA requirements. The college will get the money back after the first class graduates. The COCA staff has reviewed and approved a feasibility study, according to Parker, with a site visit planned for early 2015. The next stage of review with COCA is set for April, with “provisional” approval hoped for in August.

Also, the college has hired 13 employees, including senior staff.

Parker would directly discuss the NYiT application denial.

“I don’t know why they (NYiT) failed or why they were denied. ... We’re just working on what we are doing here in Fort Smith,” Parker said.

Home sales across Fort Smith continued to rally through November with another double-digit growth rate marking the third consecutive month of solid gains.

Agents and brokers have sold 1,251 homes in the Fort Smith metro area through the first 11 months of this year. The value of those sales totaled more than $171.247 million, a gain of roughly 10% from a year ago, according to MountData.com.

In November alone there were 86 transactions valued at $12.341 million. Unit sales rose 9.5% from 77 recorded a year ago, with volume gains of 21% over the $10.215 million last year.

Clif Warnock, broker with Warnock Real Estate in Fort Smith, said the local market rally is partly due to an uptick in higher priced home sales over the past three months.

“Over the past several years we might have an average of 2 to 3 properties sell at prices between $800,000 and $1 million. We recently closed four of those transactions and six have been sold this year. This surge of high-end sales has pushed up overall sales volume numbers,” Warnock said.

Warnock the local buyer pool has seen several higher income families moving in and out of the region related to management changes at some of the region’s largest employers. He said overall sales have been steady the entire year leading up to the past three months and Warnock expects the momentum to carry into 2015.

In Crawford County, Warnock said the market still provides a 15% percent value in prices over neighboring Fort Smith, which keeps activity steady there as well.

Through November MountData reports 575 home sales in Crawford County which are worth more than $68.316 million, a gain of 22% in units sold and 30% higher overall volume than a year ago.

Last month agents sold 49 homes in Crawford County, down slightly from 51 a year ago. Sales volume rose to $5.838 million last month, up from $5.748 million in the same period last year.

“One big advantage for buyers in Crawford County is that they can still get the Rural Development loans which provide 100% financing. When that is added to the 15% pricing values and the low interest rates it’s easy to see why first time buyers and other moving to Fort Smith would consider the Van Buren market,” Warnock said.

He said prices have been fairly steady in the Fort Smith market for several years. MountData reports median prices of $115,250 through November of this year. This is flat against 2013 and down slightly from the $118,000 recorded in 2012. 

The one area Warnock said Fort Smith is lacking is in new home construction. He said there is some activity near Chaffee Crossing, but it comes after several years of very little building. He said the resale market is strong but the new home market demand has been somewhat tepid because prices in competing homes built a few years ago are very good.

Moving into 2015, Warnock said interest rates may go up, but he’s hopeful not too much, because the lower interest rates have been partially responsible for more buyers being able to get into the market. He said buyers who purchased homes four or five years ago, have already been able to move up in some cases because of lower interest rates and most home appreciation.

That said, buyers who purchased at the market peak some 10 years ago likely still find themselves unable to sale and repurchase, Warnock added.

On the national scene Wells Fargo reports home builder sentiment is steady moving into 2015. But they predict buyer traffic will be flat against 2014 numbers.

Home Sales Data (January - November)
Crawford County
Unit Sales
2014: 575
2013: 473

Total Sales Volume
2014: $68.316 million
2013: $52.818 million

Median Sales Price
2014: $109,700
2013: $106,250

Sebastian County
Unit Sales
2014: 1,251
2013: 1,132

Total Sales Volume
2014: $171.247 million
2013: $155.730 million

Median Sales Price
2014: $115,250
2013: $115,000

A report presented Monday night (Dec. 15) to the Fort Smith Board of Education appears to throw a wet blanket on previous talk among school officials to soon build a third, $65 million high school on land donated by Chaffee Crossing.

Preston Smith, owner of Kansas City, Mo.-based Business Information Services, told school officials and a small contingent of area business leaders that Fort Smith’s two high schools – Northside and Southside – could run out of space in three years, but a new high school complex is not necessary.

“Under the current grade configurations, we believe there is adequate space to hold both the future elementary and junior high students, by redrawing some attendance boundaries. However, the high schools could run out of space as soon as three years from now. If the high school attendance lines are not redrawn, we estimate that an additional 70,000 sq. ft. of classroom space could be needed to accommodate the enrollment,” Smith noted in a lengthy 349-page report that include numerous pages of maps and demographic information.

Asked after the presentation if the report may stifle the push for a third high school, Dr. Benny Gooden, superintendent of Fort Smith Public Schools, rejected the notion that he or the Board had pushed for a third school. He said it was merely one of several options.

“I’ve never pushed for a third high school,” Gooden told The City Wire, adding that there may still be a need for a new high school beyond the 10-year period covered in Smith’s report.

THIRD HIGH SCHOOL DEBATE
Gooden has said the district's population of 14,313 students was expected to blossom to about 17,000 students by the year 2023, which would necessitate a third high school and re-alignment of freshman to the city's high schools.

Earlier this year and in 2013, Gooden said based on the continued increase since the year 2000, he and the Fort Smith Board of Education have been looking at different options for addressing the needs of Fort Smith's High School students. Three options were primarily looked at:
• Do nothing;
• Increase the use of portable buildings on campuses and possibly expand existing campuses;
• Construct a new Fort Smith high school and realign the student populations across all junior high and high school campuses.

Conservative estimates for construction of a new high school place the project at about $65 million, with the district needing seek a millage rate increase from 4.5 mills to 6.5 mils.

However, talk of the third Fort Smith high school was challenged after a Feb. 24 school board meeting in which a group of concerned residents and business leaders requested more research before the district decides another high school is needed. In response to the request, the school board agreed to hire Smith and his firm to conduct a demographics and enrollment projection study.

REPORT HIGHLIGHTS
Smith’s presentation Monday took less than 30 minutes and he presented 20 slides to summarize his lengthy report. Highlights of his report include the following.

• The district has a capacity, based on a square footage calculation, for 17,246 students and our high-end enrollment projection for 2024-25 is for 15,037 K-12 students.

• We recommend that if the Fort Smith School District expands its pre-Kindergarten program, that a 9th Grade Center be constructed on the 98 acres of donated property at Chaffee Crossing, and within the next three years add at least 70,000 sq. ft. of classroom space to the two high schools. We would also recommend that the elementary grades be reconfigured from K-6 to K-5, with 6th graders added to the new junior high enrollments of 6th through 8th, once the 9th grade center is opened.

• Capacity issues at the elementary and junior high schools could be overcome by redrawing attendance boundaries since there is sufficient space to hold the current and future students.

• We found 3,746 students in the district who are not attending the school in the area in which they live, on the 2013-14 roster. This is about 22% of the total number of students who enrolled in the district during that year. This large number of students not attending schools in the same zones where they are live can create student management issues, such as how capacities could be realistically redistributed.

• Three statistical models project that Fort Smith’s district enrollment will be between 13,844 and 14,964 by 2024-25. This is assuming an annual enrollment growth of be-tween 0.61 percent and –0.166 percent. For the last 10 years, the growth rate has been 1.192 percent per year.

• In 2000-2010, the population in the Fort Smith district increased by 4,970 persons. Enrollment increased by 1,510 students, which means that for every three persons who moved to the district, there was a new student. Demographic vendor data predicts that during the next decade the district will grow by 4,575 persons. Based on the 3:1 ratio, that means enrollment should increase by 1,430 students. The enrollment has already increased by 525 since 2010, so either the district’s enrollment is going to have to pick up considerably or the ratio is going to fall more back in line to a five or six-to-one ratio, that we see in most other districts.

• Birth rates for the district have fallen dramatically since 2009. In fact, birth rates have fallen nearly 17 percent. It has been more than 20 years since the number of births in 2013 have been so low. A regression model based on births in the school district shows there would be only 961 Kindergarten students by 2018, 13 percent lower than the current enrollment. Unless there is a strong reversal in births in the district, we believe the long-term outlook for the district’s enrollment is negative.

• Demographic trends during the next decade point to stagnant average household sizes (already lower than the national average), more childbearing-age women who would be having fewer children, fewer children under 5 years old and more school-age children. 

• On average, each new house built results in 0.196 new students, or five new houses equal one new student. For every 14.3 new jobs in the Fort Smith metro, the Fort Smith School District realizes one new student. In both cases, the predictability statistically is very weak.

• In the 2014-15 school year, there were two record-size cohort grades. Closer analysis shows that the 2006-07 1st grade class accounted for all the record-size cohorts except for only four grades. This does not point to a district that has a growing enrollment, which usually has several record-size cohorts in the most recent school year.

• In 2010, 85 percent of the available school-age children living in the Fort Smith School District attend the public schools. So there were 2,215 children either home-schooled or attending private schools in 2010. Of the 11 private schools within 15 miles of the Fort Smith district, enrollment has fallen from 1,575 in 2005-06 to 1,242 in 2014-15.

(Link here for the large PDF file of the Demographics and Enrollment Projection Study.)

SCHOOL REACTION
Gooden’s office issued a five-page response to Smith’s study – some of which challenged and agreed with Smith’s findings.

“The demographic data, economic projections and other data are useful and will serve as a resource as the Board of Education continues to evaluate its options in addressing space needs to serve Fort Smith students far into the future,” Gooden noted.

Gooden’s response also noted that Smith’s study “is not dramatically different” from one produced by Ken O’Donnell when he was employed by the Western Arkansas Planning and Development District.

“However, Mr. O’Donnell’s projection also went out to 2030 which is beyond the 10-year window in this study and in keeping with the long-range view discussed by the Board of Education during the past several years,” Gooden wrote.

Counterpoints to Smith’s study noted in Gooden’s response include:
• Criteria used by Smith to determine school building capacity (needed square feet) “is based on a universal model of some 20 years ago” and does not reflect Arkansas school facility standards.

• Projected enrollment at the various schools in the system “does not take into account the longstanding transfer options sanctioned by current policy” or the mobility statistics within the district.

• School districts compared to the Fort Smith Public School District “are all districts with less diversity, significantly more affluence and virtually none of the characteristics found in a purely urban environment like Fort Smith.”

• Although Smith rejects the idea of a new high school, the Fort Smith Board of Education has said a new high school “is the most forward-looking and costly option, but it is designed to address needs well into the 15-20 year future. It is also the most disruptive to the status quo.”

• The report from Smith “does not evaluate the current facilities relative to functionality and overall condition. This was not part of the agreed upon scope of this study, but is important in terms of future planning.”

BUSINESS REACTION
Part of Smith’s report found that for every 14.3 new jobs created between 1990 and 2013, only one new student enrolled in the Fort Smith Public School District. The finding countered conventional wisdom that more jobs mean more students.

Tim Allen, president and CEO of the Fort Smith Regional Chamber of Commerce, did not dispute Smith’s findings. He said it may be that those with the new jobs look for other school districts in which to live.

“A lot of people want more options when it comes to K through 12,” said Allen, who attended the Monday presentation.

He said he knows of several situations where company officers work in Fort Smith, but travel from as far away as Fayetteville because they believe another school district or residency will be better for their children by providing access to STEM programs/schools or unique charter schools.

Overall, Allen said the report was impressive, and served as a reminder that “there is no one answer” when it comes to dealing with school growth.

Sam Sicard, president and CEO of First National Bank of Fort Smith, and one of the business leaders who pushed for the report, praised its detail and analysis. He said the lower enrollment projections were not a surprise.

“That was more in line with what we thought they would be,” Sicard said.

He also said a closer partnership between the school district and the University of Arkansas at Fort Smith may result in programs that would not only provide public school students more career-education options, but also alleviate the need for more public school space.

“There are innovative things like that out there and we should look at those,” he said.

Sicard later sent this statement to The City Wire: “We are pleased with the thoroughness of the research-based analysis  the consultant provided. We commend the Board for taking this step and were impressed with the consultant the School Board selected. The report indicates total enrollment will most likely increase by only a little more than 400 students over the next decade, which is far less than previous estimates that were provided to us that we questioned. This slowdown in enrollment growth is strongly supported by the consultant's research that there has been a 17% reduction in birth rates in the district over the last several years.

“We believe there are several attractive solutions to address this modest projected growth. One possible solution that we hope is explored is attempting to significantly expand the number of high school students attending UAFS to get a head start at furthering their education. We believe this will lower college student debt, increase higher education degree completion rates, help retain more students in our community, while also relieving some of the capacity challenges at our two high schools.

“We would like to express our sincere gratitude to the Fort Smith Public School Board of Education for listening to our concerns and for their dedication to the academic achievement and future success of our community's children.”

Wal-Mart Stores, the nation’s largest private employer, was hit with a $188 million order this week by the Pennsylvania Supreme Court over failure to allow workers their full meal and rest breaks. Braun/Hummel versus Wal-Mart, a class action case, was originally filed in March 2002 for the class period beginning in 1998 and ending in 2006.

The original ruling was handed down in 2006 but Wal-Mart appealed in 2011. Monday’s (Dec. 15) decision was an answer to that 2011 appeal. Aside from reversing some of the attorney fees, the court largely affirmed its original order, according to a filing with Securities and Exchange Commission on Tuesday (Dec. 16).

“We disagree with the decision, and continue to believe that these claims should not be bundled together into a class action lawsuit. We are reviewing the opinion closely and considering our options, including a petition for review by the U.S. Supreme Court,” said Wal-Mart corporate spokesman Randy Hargrove.
 
Continuing, Hargrove noted: “Most of these claims are over 10 years old. Wal-Mart has had strong policies in place to make sure all associates receive their appropriate pay and break periods. We have taken additional steps over the last decade, including enhancing our timekeeping systems and additional training, to make sure all our associates understand the importance of those policies and comply with them. We are committed to our 1.3 million associates who work hard every day to serve our customers.”

The lawsuit represented approximately 187,000 employees who worked in Pennsylvania between 1998 and 2006. The plaintiffs alleged they were promised paid rest and meal breaks, but were forced to work on breaks and “off the clock” because the stores were “chronically understaffed.”

The original court found Wal-Mart owed $78.5 million in unpaid wages for off-the-clock work and break violations from March 1998 to April 2006. The trial judge also awarded an additional $62.2 million in statutory liquidated damages, $10.2 million in prejudgment interest, $33.8 million in statutory attorney fees and $11.9 million in non-statutory attorney fees. 

On Monday, the Pennsylvania Superior Court affirmed the bulk of that judgment at roughly $188 million.

"We are gratified by the Court's decision and hope that after all of these many years our clients will finally be paid all of the money they worked for and are owed by Wal-Mart,” said Michael Donovan, attorney for the class members.

This latest decision will require Wal-Mart to pay post-judgement interest at 6% dating back to the Nov. 14, 2007 date the original judgment was rendered, unless it is set aside on future appeal.

This order is going to pinch profits for the retailer who said it will incur a charge of roughly 6 cents per share in its fourth quarter earnings relating to this matter. That amounts to roughly 4% of its profit forecast of $1.46 to $1.56 for the period ending Jan. 31.

Wal-Mart shares were trading down only slightly on Tuesday, following the company’s SEC filing that outlined the impact to fourth quarter earnings. Shares were down 17 cents to $83.77 in the morning session. Over the past 52 weeks Wal-Mart shares have traded from a high $88.05 to a low $72.27.

Consumers in Arkansas report having less existing mortgage debt and higher overall savings rates than their neighbors in Missouri and Oklahoma, according to the third phase of the Arvest Bank’s Consumer Sentiment Survey completed for the fall of 2014.

Home ownership numbers decreased in the recent survey which was completed in October. Arkansas respondents holding a home mortgage fell six points to 31% in October, down from 37% in June’s survey. Additionally, only 3% of Arkansans said they plan to get a home mortgage in the next six months.

More Arkansas households are focused on savings as evidenced by the state’s household savings rate which rose from 9.5% in the June survey to 11.9% most recently. While the percentage of those planning to increase their savings rate dropped from 23% to 18%, the number of those planning to maintain their current rate increased to 71% of respondents.

“In Arkansas, there was a marked decline in the number of respondents indicating that they have existing mortgage debt,” said Kathy Deck, director of the Center for Business and Economic Research (CBER) at the University of Arkansas. “When this response is combined with that of higher savings rates and the intent to maintain those savings rates, a reasonable interpretation is that Arkansans remain cautious and conservative about taking on new debt.”

The survey also revealed that Arkansas consumer debt is below that of their neighbors in Missouri and Oklahoma in mortgage and home equity.
• Arkansas: Mortgage 31%, home equity 4%
• Missouri: Mortgage 36%, home equity 8%
• Oklahoma: Mortgage 34%, home equity 6%

Student loan debt reported by the survey respondents indicated that 12% of Arkansas and Oklahoma consumers are carrying it, while 17% of Missouri respondents do so.

SPENDING HABITS
Arkansas consumers saving more money are spending less on major household purchases. According to the recent survey just 36% of Arkansans said they have made a major household purchase in the last six months, down 3% from June. That includes items like furniture, televisions and refrigerators. 

Most Missouri respondents indicated they have not made a major household purchase in the past six months. Only 35% reported making such a purchase, down from 38% in June.

The same was true in Oklahoma as more respondents indicated they have not made a major household purchase in the past six months. Only 38% said they had made a large household purchase, down from 43% in June.

The October survey also found that in Arkansas 26% of respondents do plan to make a major household purchase in the next six months. The others said they were waiting until the right time to buy and did not want to comment to a certain time period.

This buy attitude was seen in 27% of Missouri respondents and in 22% of Oklahoma respondents that were committed to making a major purchase in the next six months.

“Arkansas consumers seem to be serious about saving, which almost always is a good idea,” said Steve Burkhead, vice president and location manager at Arvest Asset Management in Washington County. “It also appears they are waiting to make major expenditures at a time that is best for them. We’re encouraged by that kind of forethought, and are ready and willing to help our customers plan their future financial path no matter what it might entail.”

FUTURE HABITS
Deck said consumers have more cash in their pockets from lower gas prices and she expects they will spend the majority of that money whether it’s for entertainment or purchasing small items. She said consumers seem to be more hesitant about taking on longer term debt and the added $50 to $75 per month in their pockets won’t likely change that.

For the first the time the survey asked respondents about their intentions to acquire credit in the next six months and any problems they expect in doing so.

3% of Arkansas and Oklahoma respondents said they plan to acquire a home mortgage in the next six months. This compared to 2% of respondents in Missouri. Roughly 5% of respondents in the region and in Arkansas said they plan to acquire credit to buy a car, while 4% of regional respondents said they will add to credit card debt. 

The vast majority of respondents (70%) said they have no plans to acquire any credit in the next six months. There was 5% regionally who said they did expect some difficulties in acquiring new loans.

Doug Babb, CEO of Fort Smith-based Cooper Clinic, one of the largest physician-owned medical groups in Arkansas, is stepping down at the end of 2014. His more than seven-year run as the clinic’s chief came during a time of significant change in the regional medical community.

Curtis Ralston, now the chief operating officer of Cooper Clinic, will become the next CEO in January, according to a statement from Dr. Michael Callaway, president of the Cooper Clinic Board of Directors, and Dr. Daniel Mackey, incoming Board president.

Babb had told the Board earlier this year he planned to retire by year end, and wanted to work with the Board on a succession plan.

“I took this job after leaving Beverly because it seemed to me that Cooper Clinic, like Sparks, like Mercy, like the independent physicians, was very important to the community. So I felt that I could make a positive impact on the community and for the patients and I believe I have done that,” Babb told The City Wire.

Babb was hired as CEO in July 2007. Prior to that he was the chief administrative officer and chief legal officer of what was then Fort Smith-based Beverly Enterprises. His career also includes being a senior vice president at Burlington Northern Santa Fe Corp.

“Doug Babb is both well-known and well-respected in our community. While serving as our CEO, Doug and his wife, Kathy, have worked tirelessly to share their time, talent, and resources with many organizations including the Donald W. Reynolds Cancer Support Foundation, the University of Arkansas-Fort Smith, the U.S. Marshals Museum, and the Fort Smith Symphony,” Callaway noted in the statement. “Doug is now anxious for the freedom of retirement so that he and Kathy can spend more time with their daughter who has now graduated from college and is living out of state. He will certainly be missed at Cooper Clinic, but his retirement is well-deserved.”

Part of Babb’s community involvement includes a donation by he and wife Kathy that resulted in the Doug and Kathy Babb Student Professional Development Center which is housed in the newly expanded and renovated Boreham Library. The center provides UAFS career-preparation programs and services to students to give them a competitive edge in acquiring employment opportunities or pursuing graduate education. The center was also designed to serve as a resource to the business community.

INDUSTRY CHANGES, ISSUES
Babb’s more than seven-year tenure saw several major healthcare industry developments in the region and nationwide. Fort Smith-based Sparks Health System changed ownership twice – first being purchased by Naples, Fla.-based Health Management Associates, and then again when HMA was acquired by Franklin, Tenn.-based Community Health Systems.

Cooper Clinic also began to shift from being exclusively affiliated with Mercy-Fort Smith (then St. Edward Mercy Medical Center) to also having Cooper physicians work within the Sparks Health System network.

Part of the changes in the medical industry also saw a shortage of doctors, and it is an issue that continues to be a struggle for medical operations in the region. The recruitment of doctors fueled a 2013 legal tiff between Cooper Clinic and Mercy-Fort Smith. The suit, filed Aug. 2, 2013, by Cooper Clinic against Mercy Fort Smith and St. Louis-based Sisters of Mercy Health System, alleged that Mercy and its parent company used their economic power to recruit 15 physicians away from Cooper and to the Mercy Clinic between Oct. 31, 2010 and Aug. 1, 2013. The lawsuit has not yet been resolved.

However, the biggest change faced by the clinic in recent years was the passage of the new federal health care law (Affordability Care Act, aka, Obamacare) and the ongoing transition to follow the new access and insurance rules mandated by the law.

THE NEW BOSS
Ralston, a certified public accountant and native of Oklahoma, joined Cooper Clinic in 2011 as chief financial officer, and was eventually promoted to chief operating officer. Ralston earned his master’s and bachelor’s degrees in accounting from Oklahoma State University and has 19 years of accounting experience, including nine years in CFO positions in the healthcare industry. He and his wife, Brent, have two children.

“We are well equipped for continued success as a result of the policies and processes implemented by Doug, and the internal leadership he has fostered. Under Doug’s guidance, Curtis Ralston has been well prepared for his promotion to CEO,” Mackey said in the Cooper statement. “Over the past three years, Curtis has developed a detailed knowledge of our business, and in recent months, has led the implementation of our practice management system and several patient process improvement projects.”

Founded in 1920, Cooper Clinic is a locally-owned multi-specialty group with physician offices in Fort Smith, Van Buren, Greenwood, and Paris, as well as three ProMed Urgent Care Centers. The opening of a Booneville office is planned for Spring 2015.

Enplanement traffic at the Northwest Arkansas Regional Airport (XNA) likely broke a new annual enplanement record on Dec. 5, and could end the year with around 640,000 enplanements. Traffic also is strong in Fort Smith, where the regional airport could end the year with a 10% gain in enplanements.

Of Arkansas’ top three commercial airports, only the Bill & Hillary Clinton Airport (Little Rock National Airport) is on track to post a decline in 2014 compared to 2013.

Travelers flying out of XNA during November totaled 49,222, up 6.47% compared to the 46,229 during November 2013. For the first 11 months of 2014, enplanements at XNA total 591,480, up 10.37% compared to the same period in 2013. The year-to-date 2014 traffic is up 7.17% compared to the same period in 2007 – the year XNA reached its record enplanement of 598,886. (See XNA and Fort Smith enplanement histories at the end of this report.)

Airport officials have said an overall improvement in the national and regional economy along with fare price reductions are the primary reasons for enplanement gains.

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. 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 November enplanements of 7,850, up 19.24% compared to November 2013.

Enplanements for the first 11 months of 2014 total 85,460, up 9.91% compared to the same period in 2013. With 49,949 enplanements year-to-date, American Airlines accounts for 58.44% of commercial traffic out of Fort Smith. Delta Air Lines had the remaining market share.2014.

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.

Enplanements at the Fort Smith Regional Airport totaled 86,653 during 2012, just ahead of the 86,234 in 2011, and marked three consecutive years of enplanement gains.

LITTLE ROCK NUMBERS
Enplanements at the Bill & Hillary Clinton Airport (Little Rock National Airport) were 92,447 in October, down 1.86% compared to October 2013. Enplanements for the first 10 months of 2014 were 875,531, down 4.63% compared to the same period of 2013. (The airport did not have November numbers posted as of Dec. 16.)

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.

With 247,107 enplanements during the first 10 months of 2014 Southwest posted the most enplanements of the eight carriers operating out of Little Rock. However, the enplanement count for Southwest was down 13.52% in the period. The only major carrier to post a year-to-date gain in Little Rock was American, with a 4.3% increase, Delta enplanements are down 0.87% in the 10-month period, and United Airlines numbers are down 6.7%.

ENPLANEMENT HISTORY (Fort Smith Regional Airport, since 2000)
2013: 84,520
2012: 86,653
2011: 86,234
2010: 86,129
2009: 78,432
2008: 87,030
2007: 99,127
2006: 94,717
2005: 102,607
2004: 92,928
2003: 90,493
2002: 87,944
2001: 95,419
2000: 104,182

ENPLANEMENT HISTORY (Northwest Arkansas Regional Airport, since 2000)
2013: 581,487
2012: 565,045
2011: 562,747
2010: 570,625
2009: 540,918
2008: 571,845
2007: 598,886
2006: 586,320
2005: 583,940
2004: 511,714
2003: 448,228
2002: 400,063
2001: 374,122
2000: 367,157

Walmart’s private label grocery and consumable products continues to offer substantial savings for consumers watching every dime they spend, according to a recent pricing survey completed by Raymond James & Associates.

A consumer who purchased a basket of 55 grocery and consumable products in December at a typical Walmart Supercenter or Neighborhood Grocery Store would have saved $45 on the $160 purchase by choosing private label products or rollback items over branded everyday low priced products, according the study.

Officials with Walmart U.S. have worked over the past year to introduce lower price points through expanded private label and smaller package sizes to better compete with Aldi and Dollar General who continually outperform Walmart on grocery basket challenges that look at opening price points.

Walmart U.S. CEO Greg Foran said in October that he expects to introduce more private label products where there are opportunities for growth. He said Walmart’s private label ventures must provide like quality with price savings for consumers because the retailer’s reputation depends on it.

“If ever the quality of our store brands are questioned, I need to hear about it,” Foran said.

The brands compared in the Raymond James survey to Wal-Mart’s Great Value and Equate alternatives include: Kraft, General Mills, Barilla, Maxwell House Coca-Cola, Bud Light, Tyson Foods, Nestle, Nabisco, Planters, Oscar Meyer, Ragu, Peter Pan, Welch’s, Heinz, Campbell’s, Bounty, Charmin, Listerine and Tide.

For just the edible grocery category the savings between private label and branded baskets totaled $29.24 or 17.8%.

Store brands account for about one of every four products in a supermarket – and they're branching into niches that lack national-brand competition such as balsamic vinegar or chocolate-covered raisins. 

Grocery analysts say their popularity is understandable, considering that they typically cost 15% to 30% less than name-brand counterparts.

Consumer Reports tested a wide array of private label products agains their branded counterparts last year and found many were more than 30% cheaper with similar quality concluding the name-brand premium is largely the result of advertising and promotional costs that are passed on to consumers. The Consumer Report study concluded Wal-Mart, Sam’s Club, Costco and Target were each winners in every category. Most of the Sam's Club products were 50% or even 60% cheaper than the name brands, but required consumers to buy warehouse-size packages.

The private label savings reported by Raymond James were a widest in dairy, meats and snack items, all of which were found to have comparable quality. Some of the biggest savings are identified below:
Items (first cost is branded item, second is private label cost, third figure is savings)
• Gallon of milk: $5.98, $4.35, 27%
• Kraft singles cheese: $3.28, $2.88, 12.2%
• Eggland’s Best Eggs: $2.78, $1.98, 28.8%
• Wonder Bread White: $1.98, $1.28, 35.4%
• Barilla Thin Spaghetti: $1.28, $1, 21.9%
• Kraft Mac n’ Cheese: $0.98, $0.50, 40.8%
• Lipton Tea Bags: $3.48, $1.98, 43.1%
• Coca-Cola Classic: $4.48, $2.69, 40.2%
• Nabisco Oreos: $2.98, $1.98, 33.6%
• Planters Peanuts: $3.50, $2.48, 29.1%
• Perdue Chicken Breast: $4.48, $1.99, 55.6%
• Heinz Ketchup: $2.98, $1.68, 43.6%
• French’s Brown Mustard: $1.97, $1, 49.2%
• Morton Iodized Salt: $0.8, $0.50, 39%
• Advil Tablets: $7.97, $2.48, 68.9%
• Listerine Mouth Wash: $5.97, $2.98, 50.1%

Some of the items showed no difference in price between branded and private label, such as Irish Spring soap (3 bar package) which cost $2.47 for the branded and private label versions. Secret Ladies Deodorant solid cost $2.21 for the branded and private label products while Tyson Frozen Chicken Nuggets priced at $4.97 were identically matched to the private label Great Value brand. The same was true for Rice-a-Roni and the Great Value version each priced at $1 per box.

Raymond James analysts said the savings between Walmart’s branded and private label (Great Value, Equate, Sam’s Choice) basket decreased 2% from the November report. Annually, the savings decreased to 22% from 26% last December as the retailer has added more rollbacks during this holiday season.

Wal-Mart’s Savings Catcher program that provides price matching against weekly sales of its competitors does not include private label products but only branded items.

In the Florida market where Raymond James conducted its pricing survey, Wal-Mart’s branded basket prices are 7% lower than like product at Target and 17.5% cheaper than the basket at Publix.

It was a big dollar, big decision night for the Fort Smith Board of Directors. The Board approved – after a third reading – a roughly $48 million general fund operating budget and accepted the controversial settlement with the Department of Justice that may require an estimated $480 million investment by 2026 to improve the city’s water and sewer system.

The costs – which could result in a tripling of water and sewer bills for all city customers on the Fort Smith system – are part of a possible agreement between the city of Fort Smith and the Department of Justice related to Clean Water Act violations with the city’s water and sewer system. The U.S. Environmental Protection Agency turned the matter over to the DOJ in 2006.

Details of the settlement plan and cost estimates were first discussed publicly at a Dec. 9 special session of the Fort Smith Board.

SETTLEMENT OVERVIEW
Of the $375 million capital costs, 39% ($145 million) is for defect remediation, 17% ($63 million) for capacity remediation, 12% ($45 million) for pumping improvement and 10% ($37 million) for engineering and professional services. Treatment, capacity assessment and current projects are also included in the capital costs.

Of the $104 million in operations and maintenance costs, 26% ($27 million) is estimated for collection system maintenance and repairs, 23% ($24 million) for extra staff and management support, 13% ($14 million) for treatment and pumping maintenance, and 13% ($14 million) for information management. The remainder will cover project management, root removal and pre-treatment work.

While the proposed settlement between the city and the DOJ is complex, the primary purpose of action is to increase capacity to eliminate wet weather overflows and address remedial defects to eliminate dry weather overflows. The time frame outlined in the city's presentation of the proposed consent decree terms extend for 12 years, giving the city time to invest the needed funds to bring the sewer system up to standard.

Under the agreement, the city must begin to monitor overflows in wet and dry weather situations and report all overflows to the Environmental Protection Agency. The assessments must focus on finding the dry weather blockages and intrusions in lines that cause overflows during dry periods. These can include grease blockages and roots that have grown into water lines over periods of years or decades. Testing private lines of residential and commercial users could involve smoke testing.

‘OVERREACH’
City Directors Mike Lorenz and Kevin Settle said the federal terms in the settlement represent federal overreach, with Settle also expressing frustration at having such a short time to review and vote on a broad and detailed deal.

Settle noted that language in the deal penalizes the city even if an overflow does “not reach the waters of the United States.”

“How can the Clean Water Act govern something that happens in my yard? ... This is where the federal overreach has hit me so hard,” Settle said.

In part of the lengthy conversation between the Board and city staff and attorneys, Settle said the Board does not have enough data on costs to residents and businesses to vote on the settlement.

“I have had this document for one week, and I’m supposed to approve it and set the course for more than 30 years,” Settle said.

Jerry Canfield, an attorney for the city, said delaying a vote up to 60 days on the settlement would likely result in the Department of Justice filing a lawsuit against the city.

“They have a signed complaint and they will file the complaint,” Canfield said.

As to the question of overreach, Canfield said the process by which the city must acquire permits to operate a water and sewer system gives the EPA and DOJ the “jurisdictional power” to ask the courts to fix the problems.

City Director Keith Lau said the work is mandated by the feds but not necessarily the $480 million cost estimate.

“We are no in any way tagging a number with this agreement,” Lau said, noting that the process still gives the city time “to hammer on those costs” through the process. Lau later added that the Board and city staff “owe it to the citizens to take a fundamental look” at how the city’s water and sewer system operates and how it is managed.

The Board voted 5-2 to approve the settlement, with Lorenz and Settle opposing.

2015 BUDGET, COMPREHENSIVE PLAN
The 2015 general fund budget was approved after the third reading by a 4-3 vote, with City Directors Keith Lau, Mike Lorenz and Kevin Settle opposing the budget.

Lau has vocally opposed the budget because it includes spending $2.14 million more than expected revenues. He has also said the city's reserve fund of 7.5% in the 2015 budget is below stated minimums in the Board's own policy mandates.

Another reason Lau said he would vote against the budget is because it does not address the upcoming insolvency of the police and fire pension contribution fund, which the city's own projections show going broke in 2019.

John Cooley and Galen Hunter, citizen members of Comprehensive Plan Steering Committee, presented an updated Comprehensive Plan to the Board. Hunter asked the Board to appoint a committee to review progress on the plan “so we don’t wind up with a piece of work that is on the shelf."

Director Settle asked for a study session in early 2015 to begin “integrating” an implementation committee into city functions and budgets.

Cooley has said the plan is more of a road map than a hard set of policies and initiatives for the city to undertake.

"It certainly focuses on economic development and natural resources and transportation and infrastructure and all those things that, I think, make perfect sense in our world," Cooley said in an Oct. 17 committee meeting.