A majority of the Fort Smith Board of Directors appear open to the idea of redirecting a portion of the city’s sales tax revenue for streets to help fund a plan to create a “continuous” and “connected” trail system in the city. The Board was also open to helping fund the inaugural Steel Horse Rally planned for downtown Fort Smith.

Both items dominated the Board’s noon study session on Tuesday, with Drew Linder using about 30 minutes to brief the Board on a plan developed by a citizen committee to add 35 miles to the city’s trail system.

Linder, a banker with First National Bank of Fort Smith, said the Trails and Greenways Steering Committee – with input from the University of Arkansas at Fort Smith Student Government Association – based their outline on trail plan the city adopted in 2004. The proposed plan would almost create a trail loop around the city. Linder said the committee’s primary goal was to develop a trail system that is “continuous and connected.” Cost estimates for the work range from $17.4 million to $9.6 million. (Link here for details about the proposal from the steering committee.)

The trails, Linder told the Board, should be referred to as “multi-use” because roughly one-third of trail users are walkers, one-third are runners and the other third are cyclists. Trails are developed and maintained by more cities, according to Linder, because they provide a health and wellness outlet, provide a basic transportation network for those who prefer to use a bicycle, and are becoming an economic development advantage.

“That’s the one that got me,” Linder said of the economic development aspect, adding that he believes trails are a “significant” part of job recruitment.

Bill Hanna, president and board chairman of Fort Smith-based Hanna Oil & Gas, said there is interest from area companies to provide some funding for a trail system. Hanna and Linder said a plan approved by the city with a dedicated funding stream will help encourage private-sector support and help secure matching grants.

SUPPORT FROM TAX REDIRECTION
Funding for broad improvement and expansion of the city’s trail network could come from a portion of the $18 million to $20 million collected annually through the city’s 1-cent street sales tax program. The tax, first approved by voters in 1985, has a sunset clause that requires voter approval every 10 years. The tax was renewed by voters in 1995 with 87.2% voting yes, and in 2005 with 66.3% voting yes. A renewal vote is planned for May 12.

The initial proposal suggested redirecting 10% of the annual revenue for trails, but a majority of Board members indicated they would support a 5% redirection. A 5% plan would provide the trail system around $10 million over 10 years. With private sector support and help from grants, several Board members, including new City Director Tracy Pennartz, believed the $10 million would be sufficient.

Several Board members, including Mayor Sandy Sanders, said it will be important to educate voters about an election in which a portion of the tax is used for another purpose. In an election, the ballot would first ask voters if they approved reauthorizing the tax for streets, bridges and associated drainage work. A second question would then ask voters to vote for or against a redirection of a percentage of the tax.

“The key is going to be approving the existing street tax as is,” Sanders said as part of a statement about his concern that redirecting a part of the tax runs the risk of voter rejection of the entire tax.

A redirection of the tax could delay a few projects, including the Kelley Highway extension to Riverfront Drive, the May Branch Drainage project and the widening of Arkansas 45 south of Zero Street.

The Board is expected to vote during its Jan. 20 meeting on how the street tax reauthorization is presented to voters.

STEEL HORSE SUPPORT
Dennis Snow, president of The Steel Horse Rally Inc., made a brief presentation about the planned motorcycle rally in downtown Fort Smith. The group is asking the city for $84,000 to launch the event.

The Steel Horse Rally could see an estimated 5,000 motorcyclists and visitors in the downtown area May 1 and May 2. Snow praised the help of city departments in securing downtown locations for the event, and said a financial commitment from the city also would help raise money from potential corporate sponsors.

Outreach efforts to market and advertise the Steel Horse Rally are planned for Oklahoma, Texas, Louisiana, Missouri and states bordering Arkansas. The Fort Smith Advertising & Promotion Commission has authorized $2,500 to help with such outreach.

Snow said a conservative economic impact suggests the 5,000 would spend $300 in the city, which would generate at least $450,000 directly and more considering an economic rollover effect of each dollar.

City Directors George Catsavis and Kevin Settle were supportive of Snow’s request.

“I think this will be a good deal for downtown Fort Smith,” Catsavis said.

Mayor Sanders disagreed, saying that giving the group the money could create a negative perception with voters at the same time the city is asking for renewal of the street tax. He also said funding the event would set a precedent that the city can’t afford.

Settle countered Sanders by saying the Board had made a commitment to do more to “support an event” that brought thousands of people to the city.

“This could be that event,” Settle said.

A vote on the funding request was set for the Board’s Jan. 20 meeting.

(The City Wire co-owner Michael Tilley is a member of the Steel Horse Rally board of directors.)

Col. Bobbi Doorenbos took command of the Arkansas Air National Guard's 188th Wing from Col. Mark W. Anderson in a formal change-of-command ceremony Jan. 11 held at Ebbing Air National Guard Base, Fort Smith. The F-16 fighter pilot is the first female commander of the unit first formed as the 184th Tactical Reconnaissance Squadron in 1953.

Doorenbos assumed command after serving as the 214th Reconnaissance Group commander for the Arizona ANG at Davis-Monthan Air Force Base. There she was responsible for providing combat qualified MQ-1 Predator aircrews in support of contingency operations overseas and domestic awareness and assessment capabilities within the United States. Anderson, a long-time pilot with American Airlines, will return to his position with the company and continue flying.

Brig. Gen. Travis Balch, commander of the Arkansas Air National Guard, presided over the ceremony and lauded the accomplishments of Anderson for his service at the 188th.

Anderson took command of the 188th “Flying Razorbacks” in April 2012. During his time as commander, he successfully mobilized 375 Airmen on a deployment to Bagram, Afghanistan; aided in reassigning 20 A-10C Thunderbolt II "Warthog" airframes to their new homes at Moody Air Force Base Georgia, and the 122nd Fighter Wing Indiana Air National Guard in Fort Wayne; and led the wing through a pivotal conversion from a fighter wing to the current missions in remotely piloted aircraft and intelligence, surveillance and reconnaissance, which will also feature a spaced focused targeting squadron.

"A conversion of this magnitude, the largest in the state's history, led by the vision and strategic planning of Col. Anderson, has been phenomenal and the future is going to be bright here,” Balch said. “Thanks to the Airmen of the 188th Wing for embracing that challenge and looking toward the future.”

Anderson stressed that what has inspired him most as a leader has been the Airmen of the 188th and noted that his job has been easy and fun because of the talent, hard-work, vision and leadership of the men and women who served with him here.

Doorenbos was welcomed by Balch as he explained why she was selected to lead the 188th into a new era of intelligence, surveillance, and reconnaissance and remotely piloted aircraft excellence.

"I want to thank the state of Arizona and Col. Doorenbos, as this is truly a historic day for the 188th," Balch said. "Bobbi was the first person we interviewed and we were impressed with her from the start. She loves the mission of ISR and the men and women who do that mission. We were also impressed with her background in the national capital region and her work at the National Guard Bureau and her ISR command experience in Tucson. She has been on the forefront of that mission [ISR] and when we added everything up, it was clear to us that we needed her to be the next leader of this wing."

Doorenbos will oversee all of the 188th Wing's operations and support functions as well as manage the full-time force of federal technicians, state employees and active, guard and reserve members. The 188th consists of approximately 1,000 Airmen and is equipped with an urban search and rescue training facility; RED HORSE training capabilities; Detachment 1 Razorback Range; a remote air, zonal operations, reach back-processing assessment and dissemination, or RAZORback PAD, and the unit continues to transition into the new mission sets with state of the art equipment and facilities led by the Airmen here.

Doorenbos thanked the Arkansas leadership for making a non-traditional choice for Arkansas and for taking a chance on her.

"I'm not from here and you don't know me so I'm going to need your help to teach me the things I don't know, and to help me recognize what I don't know," Doorenbos stated. "But I come with fresh eyes, an open mind and without preconceived notions. I come here with a desire to challenge myself to do more, be more and give more. I intend to challenge each and every one of you to do more, be more and give more as well. The work ahead of us is difficult and it will come with challenges and hurdles and frustrations but together I see a future where our joint efforts will pay dividends far greater than any of us ever imagined."

Prior to her time at Davis-Monthan AFB, Doorenbos served as chief, Program Requirements and Integration Division at the National Guard Bureau Plans and Requirements office at Andrews AFB, Maryland. She oversaw the modernization of the Air National Guard's C4ISR, cyber, space, special mission C-130, simulator and battlefield Airman assets, filling critical combat and domestic capability gaps for warfighters and first responders. An F-16 pilot with more than 1,200 hours, she has flown missions in support of Operations Noble Eagle, Iraqi Freedom, and Southern Watch and has also served in numerous roles at the National Guard Bureau level to include a special advisor to Vice President Joe Biden on defense policy and intelligence programs.

Doorenbos, who will be the 188th’s first female wing commander, said while she understands the historical significance of her hire, she’s more concerned with being the best wing commander she can be.

“If I can be a role model to young females who might not have otherwise thought being a wing commander or pilot was something they could do, I think that’s a positive,” Doorenbos said. “But primarily, I want to help all Airmen achieve their full potential and keep moving the 188th forward as we get closer to being mission capable in ISR and RPA. This is an outstanding wing and I look forward to getting started.”

Jesse Core, a former Tyson Foods system analyst, is putting his Harding University master’s business degree to good use. He’s grown his beer brewing hobby from a family garage to 23 employees and counting in the past three years, and is set to expand with a third pub in Fort Smith.

Core’s growth into Fort Smith comes on the heels of a second Northwest Arkansas location in Rogers that opened in mid-2014. He’s also scoping out a location in Bella Vista and said to stay tuned for more sites in the coming months.

Core said it takes about five employees to run an offsite pub, but the added demand will also require expanded brewing capacity. The main tap room, offices and new distillery are located with the company’s Springdale headquarters at 2470 Lowell Rd. 

In preparation for the new distillery and additional offsite pubs, Core doubled his space in Springdale in recent months purchasing two more retail/warehouse units next door. He now owns the entire block of four units and is likely going to have to put some of the brew machinery outside as expansion continues. Core said the infrastructure investment in Springdale exceeds $3 million and the company works with two area banks and investors to fund the expansion.

“I am living a dream now that I have gotten the distiller’s permit to go with the brewery license. It was nearly hell to get because there is only a handful of breweries in the nation that are also distilleries. They are run as two separate divisions,” Core said.

His application for the distillery license took almost two years to complete as the government shutdown occurred during the process. He said no permits were reviewed or processed, but Core was quick to note the shutdown did not stop a certain government function.

“I could not even get a label approved during the shutdown, but they managed to continue collecting excise taxes,” Core added.

While it can take up to a year to set up as a brewery, Core said it takes two to three times longer to get the distillery license because the laws in come cases compete with  with brewery regulations. 

“We have it now, and it’s OK with me if they want to tighten up with more barriers for others,” Core joked.

Core said the local breweries have a good rapport despite competing for tap space and market share. He believes the distillery capabilities will help set his beer brands apart because he offers aged beers and whiskey products. He will also offer new local flavor profiles as early as St. Patrick’s Day.

The craft beer craze that took the nation by storm during the recession has fostered a micro industry in Northwest Arkansas as more than a dozen small breweries have sprung up in the past three years.

GOING HOME
Core grew up in Fort Smith and his dad, the late Andrew Core, along with his uncle Kit Core ran the Core’s Grain & Feed Company in the 1970s, which is now Old Town Grain & Feed on Garrison Avenue.

“Uncle Kit is one of our bartenders at the Springdale tap room who is affectionally known as the ‘grumpy ole bastard,’ but he draws them in from all around because he’s so much fun. He is going to open the Fort Smith Pub for me and we have collected old Core’s Grain & Feed memorabilia to use at that location,” Core told The City Wire.

The 41-year-old entrepreneur said he learned the craft of making beer from a former micro-biology professor at then Westark, College while he was playing baseball as a freshman.

“I was a micro-biology major back then but I didn’t like going to class much. I had a professor who enticed me to class by telling he that if I would show up and do the work, that he would teach me how to brew beer. It was a great incentive for me,” Core said.

Looking at Fort Smith today, Core said he is impressed with the amount of investment being made there from people he knows in Northwest Arkansas. 

“I do expect to see some good things happen in Fort Smith. It’s a great town. My wife and I are both from there and we’re excited to be investing in the city at this time,” Core said.

The new Fort Smith Pub is located at 701 Rogers Ave. Core said the location is close enough to the bars and pubs along Garrison Avenue being just one block over. The 1,725 square-foot building was sold for $95,475.

Core said the local pub will offer aged Arkansas Whiskey, along with another new whiskey label named for the historic hanging gallows in downtown Fort Smith.

LOCAL SOURCING
One of the more exciting elements to distilling liquor for Core, is the opportunity to work with local farmers to source grains and other ingredients used in their brewing process.

On Monday (Jan. 12) Core purchased a pick-up truck full of Arkansas Black Apples from  a local orchard which it will use in spirits and fermenting processes at the distillery.

“We are looking to source peaches, corn, grapes and other products that are grown here because we know this will give us a truly unique flavor profile with regional ties. There is no barley grown in Arkansas to speak of, so ... we have had to source local grains and fruits and we are excited about it,” Core said.

The pubs serve at least 10 varieties of Core beer and will soon have spirits, but the owner said food prep is really not in the cards aside from premium hot dogs and pop corn offered.

“I do like to work with local restaurants to bring in pizza or other food items which they can sell inside the pub that helps them too,” he said.

Aside from local sourcing, Core said the company works to be sustainable. They use steam for heating in a system that allows for recapturing energy, as well as reusing water from a heat exchanging process.

“The environment is very important to us at Core,” he said. “We are passionate about Arkansas and our entire mission is to create a beer and whiskey that Arkansas can call its own.”

REGIONAL PUSH
In the past year Core has added a few professionals to help grow the company.

Matt Biles joined the company this week as the new director of sales and marketing. Biles spent four years with Boulevard Brewing in Kansas City and the next eight years with various beer distributors in the Kansas City and Western Missouri markets. Core hinted about expansion plans by noting that the Kansas City connections are likely to come in handy for Biles.

“Jeff Genova is head of our pub operations and he was formerly the manager at Ruth’s Chris Steakhouse. We also have two microbiologists on staff and several other professionals that give us a firm management structure, which is another reason why I am so excited about the possibilities this year,” Core said.

The Rogers Pub opened in the summer and Core said the location is doing well. The pub is located in the Core Building that overlooks New Hope Road at Pinnacle Hills.  The pub operates about 1,000 square feet inside the Core Engineering office building and has a large outdoor party deck.  

He expects to open up to five new pubs in the coming months across the state and region.

The Springdale brewery is now distributing craft beers to retail establishments via five different distributorships. The brewery produces 200 kegs of beer a week, but Assistant Brew Master Richard Bell said production will increase this year with more pubs coming online and expanded distribution goals. There is also the new whiskey and spirits production that is housed in the same facility.

The brewing process for craft beer requires several steps but the basic process begins with crushed malted-barley placed in hot water before a sugar-water substance known as "wort" is collected and then boiled. After the wort is boiled, the brew master adds creativity into the equation. Hops and other ingredients are added to define the style and taste of the beer before yeast is added to begin the fermenting process. It is then cooled and carbonated. 

The liquor process takes longer but has fewer steps, according to Bell, who said the whiskey spends the majority of its time aging in the barrels, which now consume building number four at the Springdale brewery.

On Wednesday, Gov. Asa Hutchinson disclosed more details of his proposed middle-class tax cut plan, which included an adjustment at the low end of his proposal to account for a change in state tax brackets.

Hutchinson has proposed lowering the 7% income tax rate to 6% for those making between $35,100 and above, and from 6% to 5% for those making between $21,000 and $35,099. Originally, Hutchinson planned to make the floor of the tax reduction $20,000.

“Although the Governor originally announced his intention to provide tax relief for persons making between $20,000 and $75,000, that information was based on the 2012 tax brackets. The $20,000 tax bracket has now been increased to $21,000 as a result of annual inflation adjustments required by state law,” an outline of the plan released by the Governor stated.

Hutchinson’s lower tax rates would go into effect in 2016 and would reduce state general revenues by an estimated $2 million in FY 2015, $33.7 million in FY 2016, and $102.1 million in FY 2017.

Originally, the governor estimated his FY 2016 costs to be $50 million, but Hutchinson said that price tag would be “partly offset by a delay of portions of Act 1459 of 2013,” a law that reduced certain tax brackets by one-tenth of one percent.

Hutchinson’s office provided a 2016 versus 2014 tax savings estimate for net taxable income ranges.

Net Taxable Income:
$10,000 – tax savings $5
$20,000 – tax savings $15
$35,000 – tax savings $140
$50,000 – tax savings $290
$75,000 – tax savings $540
$100,000 – tax savings $65

Senate President Jonathan Dismang, R-Searcy, and Speaker of the House Jeremy Gillam, R-Judsonia, are the lead sponsors on SB 6, an “Act to Create Middle Class Tax Relief.”

Earlier today, Hutchinson also signed two executive orders. The first order enacted a state hiring freeze. The second order called for gubernatorial review of any new proposed rules and regulations.

Female leaders and a few brave men packed the room at the University of Arkansas Global Campus in Rogers on Wednesday (Jan. 14) to discuss teen pregnancy and the impact this age-old problem continues to have on the economic advancement of women.

The consensus in the room was that more education is needed at all levels if Arkansas is ever to reduce teen pregnancy numbers. Arkansas has the third highest teen pregnancy and birth rate in the country. The teen pregnancy rate is 28% higher than the national average, while the teen birth rate is 70% higher, according to Kristen Jozkowski, University of Arkansas professor and author of the one of the three reports discussed at the event. The forum was sponsored by the Women’s Foundation of Arkansas.

The annual economic impact to the state to support teen pregnancy was $143 million when last measured in 2008. The report notes that Arkansas taxpayers spent $3.3 billion in costs associated with teen childbirth between 1991 and 2010. In addition to the costs associated with teen pregnancy, teen childbearing has economic, social and health costs for the state of Arkansas including $34 million spent on public health care (such as Medicaid), and $11 million for child welfare. 

An additional $21 million and $45 million in indirect costs associated with teen pregnancy were spent on higher rates of incarceration in Arkansas and lost tax revenue due to lower earnings and spending, respectively. 

Jozekowski said the teen pregnancy rate has dropped since the 1980s but not as much as it has nationwide. Her findings showed that Arkansas teens are having sex but the majority are not using reliable forms of birth control. She said unprotected sex is the reason for the higher teen birth rate, noting that sex itself is not the problem, but it’s the lack of birth control and sex education that is lacking.

EDUCATION HURDLES
Less than 2% of teen mothers will graduate from college by age 30, and if teen moms return to finish high school the average age of completion is 22 – four years behind schedule.

In 2012, more than 25% of Arkansans under the age of 18 lived below the federal poverty level. Similar to educational attainment, poverty is a cause and consequence of teen pregnancy that continues to contribute to economic hardship for teen parents, and impacts teen mothers specifically, given that they end up doing an overwhelming majority of the childrearing.

Mike Malone, CEO of the Northwest Arkansas Council, was one of three panel members to discuss the reports at Wednesday’s event. Malone said there are 38,000 women in Northwest Arkansas that have some college but lack a degree. He said 4,000 of them live at or below the poverty level. Malone said there is a direct impact between a college degree and lifetime earnings potential and ultimately economic growth. 

“In Northwest Arkansas we have three programs in place but they all need expanding,” he said.

Malone said efforts are underway to help adults obtain college degrees. Those programs include an early childhood education program in Fayetteville funded by the Walton Family Foundation, after school programs that provide affordable childcare options, and the Graduate NWA program that helps working adults complete degrees.

Some of the voices captured in one of the reports indicated a wide range of opinions from young women about why they did or did not complete their college education. The number one obstacle is childcare affordability and accessibility. 

Panel participant Helen Reid, director of population health policy for the Arkansas Center for Health Improvement, said she is amazed that UAMS with 10,000 employees does not have a childcare program.

“One of the complaints we hear over and over is that there is not enough qualified job candidates in the region. We are sitting at a 3.9% unemployment rate and the time has never been more ripe for employers to be more flexible to get the workers they need,” Malone said.

Malone and others agreed that STEM education, emphasizing Science, Technology, Engineering and Mathematics, must be better promoted with girls because to ensure better job opportunities.

HARD CHOICES
Another common theme found in the report was the gender gap that exists between males and females, particularly those who do chose motherhood as a career path over a college degree and professional job.

Panel participant Brenda Gullett, a member of the Arkansas Board of Education and former state legislator, said she grew up in the era of Helen Gurley Brown who said women could have it all. 

“I am here to say Helen lied,” Gullett said as she was struck by the personal accounts contained in the reports from young women who said they had to make a choice between being a mom or having a career.

Gullett spent several years in the Arkansas Legislature and joked that she quit wearing hairspray and started wearing Windex because of the low glass ceiling.

Gullett reflected on her youth in Arkansas and said women were steered into the areas of Home Economics or teaching, if they got any formal college training at all. She said too many times it’s not men holding the women down, but other women at top who won’t share the “coffee recipe.” She said too many times women who make it up the ladder don’t look back to see those trapped on the floor.

Her plea was to other professional women to reach out and mentor the at-risk group and for the 27 women in Arkansas’ legislative body to take up the cause and put their name on an education bill that targets this at-risk demographic.

EDUCATION NEEDED
Arkansas is one of 14 states with no mandate to teach sexual education. In the seven years Gullet has served on the State Board of Education, she said it has been discussed just once.

Cindy Crawford, director of Hannah House in Fort Smith, has been an advocate against teen pregnancy for more than a decade. Crawford said more education is needed but the funding for it dried up in recent years. She said parents need to be educated about the age appropriateness of talking to their children about sexuality. Crawford said young professional women and men in their late 20s are the best mentors for reaching teens.

Crawford said education has to start much earlier than the teen years. She sees programs like Big Brothers and Big Sisters as a way to introduce children to role models early on. Crawford also said Parent Teacher Associations could bridge the sex education topic from the parent perspective and offer workshops to help educate parents on how to talk to their children.

STARTUP HELP
Jeff Amerine, UA professor and founder of Startup Junkie Consulting, shared his passion at the event for helping entrepreneurs with business launches, mentoring and connecting to other resources. He said too many times in the past there has not been enough emphasis promoting women in the workplace.

As a father with three daughters, Amerine said employers like Startup Junkie and others can no longer afford to ignore a demographic that makes up nearly 51% of the workforce.

“We were fortunate enough to get a $500,000 grant from the Small Business Association to establish the Ozarks Regional Innovation Hub (ORIH) that will reach out to promote women entrepreneurs, along with veterans and minorities. This is a five year plan, with the funds renewable based on performance,” Amerine told The City Wire.

He said ORIH is a broad attempt to break down barriers that have existed in the past as the startup community at large has mostly catered to white males from 18 to 30 years of age, and the majority of funding has gone to that demographic.

Amerine said the innovation hub goal is to promote more women-owned, minority-owned or veteran-owned ventures that sometimes fall through the cracks – especially if the are not technology-based ventures.

Winrock International and the Walmart Foundation are also supporters of ORIH which covers five counties including Benton, Washington and Madison in Arkansas, McDonald County in Missouri, and Delaware County in Oklahoma.

Big reductions in the amount of coal, wheat and farm products shipped on the Arkansas River were primary reasons for a 3% drop in tonnage shipped in 2014 compared to 2013. The good news is that a shipment category tied to the health of manufacturing was up 15% for the year.

The U.S. Corps of Engineers reports that 11.719 million tons floated up and down the McClellan-Kerr Arkansas River Navigation System in 2014, down from the 12.139 million in 2013 but better than the 11.687 million in 2012 and the 10.6 million in 2011.

The river system is 445 miles long and stretches from the confluence of the Mississippi River to the Port of Catoosa near Tulsa, Okla. The controlled waterway has 18 locks and dams, with 13 in Arkansas and five in Oklahoma.

Barges carried 422,100 tons of coal on the system in 2014, down 44% compared to 2013.

“We do a lot of coal, and the port of Keota does a lot of coal. But we probably haven’t touched a coal barge in about 14 months, if not longer,” said Marty Shell, president of Van Buren-based Five Rivers Distribution, which manages port operations in Fort Smith and Van Buren. “It costs more to get it (coal) out of the ground than what they can sell it for right now.”

Part of the coal reduction is because China is buying cheaper coal from Australia – a reminder of how global energy economics can have an impact on regional economies.

The tonnage numbers show 1.107 million tons of wheat were shipped on the river, down 22%. Barges carried 584,750 tons of other food and farm products on the river in 2014, down 29% compared to 2013. Coal, wheat and farm products shipments are in the “outbound” segment, which totaled 4.44 million tons in 2014, down 18%.

However, three sectors Shell says are often connected to economic growth saw gains. There were 3.094 million tons of sand, gravel and rock shipped on the river, up 12%; 1.659 million tons of iron and steel products, up 15%; and 461,980 tons of minerals and building materials, up 7%. The iron and steel products are inbound shipments that typically go to manufacturing operations.

“That’s a good indicator of what manufacturing is doing. When you have iron and steel up, it shows that manufacturing is strong,” Shell said.

Iron, sand, gravel, and minerals are classified as inbound shipments. Such shipments totaled 4.676 million tons in 2014, up 11%.

He said a majority of the iron and steel and other inbound shipments go to Northwest Arkansas and other areas outside the Fort Smith metro.

“Northwest Arkansas utilizes this river system more than we do here in the River Valley,” Shell said.

As to how busy the river will be in 2015, Shell said his business is off to a good start. The first 14 days of January saw “very strong” activity, especially with inbound steel shipments, he said.

“We’ve had a good strong year (in 2014), so I now have nothing to complain about. ... We think we will have a good year this year.”

Buddy Wray does not fear mistakes or weaknesses. They are essential to the growth of any company, he says. But there is a caveat.

“Now, don’t make the same mistake over and over,” he noted during a recent interview.

And weaknesses are good only if honestly assessed, with the assessment used to develop strengths within processes, products and people. Or all three at the same time.

“Too many great things happen through mistakes, so you have to look at those ... and find strengths in what your weaknesses are.”

Donald “Buddy” Wray, 77, one of the legendary execs who helped Don Tyson grow a regional poultry operation into a multibillion global food company, is one of four new members of the Arkansas Business Hall of Fame.

EARLY DAYS
After a short stint with the U.S. Army and after graduating from the University of Arkansas with an agri degree, Wray began with Tyson Foods in 1961. In 1959, Leland Tollett had already joined Tyson Foods – then just a regional poultry company with John W. Tyson and his son, Don, running the show. Tollett had encouraged the Tyson’s to interview Wray.

Wray planned to finish graduate school. Halfway through the first year he was asked to visit with John W., Don and Bill Martin about working for Tyson Foods. The Tyson’s had a good sales pitch.

“Consequently, I never went back to graduate school,” Wray said.

Wray’s early job with Tyson Foods was to recruit farmers to raise chickens. He drove many miles those years, with many of those miles “where there wasn’t much blacktop.”

“You have to remember, poultry was in its infancy,” Wray said in explaining the difficulty in convincing farmers to enter the business. 

The infancy didn’t last long. Wray was promoted in 1963 to run a processing plant in Rogers that Tyson Foods acquired from Garrett Poultry Co. In those days, the plant manager of a processing plant was also responsible for sales. That’s where Wray began learning about sales and marketing. In 1965 he was moved to manage the Springdale processing plant – the original Tyson processing plant – and also assumed the sales manager role for the entire company.

Tyson Foods had around $5 million in sales his first year with the company.

“Man, I thought that was a huge company,” Wray said.

The company would post more than $7.2 billion in sales in 2000 when Wray first retired. With the $8.5 billion Hillshire acquisition under its belt, the company is poised to post total revenue of around $42 billion in its next fiscal year.

GOING PUBLIC, EXPANDING
During the same time, Tollett was rising through the ranks to run parts of the business involved in getting the chickens to processing facilities. Wray’s responsibility was then to turn the clucking chickens into higher margin dead chickens.

Wray said one of the first times he and Tollett traveled with Don to visit with market analysts, Don Tyson introduced them as “live chicken and dead chicken.”

But after going public in 1963, the company became more complex than a bifurcation based on the status of a chicken. Through the 1970s and 1980s, Don Tyson was focused on growing the company, primarily through acquisitions. By 1982 Tyson Foods made the Fortune 500 list. Wray said it was often he and Tollett’s job to integrate the new operations Don would add to the portfolio.

Although it required a bitter fight with ConAgra Foods and ended up costing Tyson Foods a premium price of $1.45 billion (roughly $450 million more than the initial offer), acquiring Holly Farms in 1989 boosted Tyson Foods’ U.S. market share in chicken to more than 25%. 

Not all of the Tyson acquisitions were a success. The 1992 purchase of Arctic Alaska Fisheries proved to be a multi-million dollar bust. Wray said it was relatively easy to know how many chickens could be produced to meet demand. There was no certainty in how many fish could be scooped from the sea.

“We just couldn’t make that work,” he said.

A year before the Alaska deal, Wray was promoted from chief operating office to company president. He held that position until he retired in 2000. He also served on the Tyson Board of Directors between 1994 and 2003.

In addition to hiring smart people “who have different specialties,” Wray said part of the success of those several decades was the chemistry between he, Don and Leland. They were similar in age, essentially grew up together in the business and had the opportunity to work several years with company founder John W. Tyson.

“Did we always agree? No,” Wray said, adding that Don “could get very mad,” but it was never personal and there never were hard feelings or grudges held.

The triumvirate of Don, Leland and Buddy appeared to have ended its run in 2000. Tollett ended his day-to-day work in 1998. Wray retired in 2000. Don had turned over company management to his son, John, in 2000.

‘GET BACK TO THE CULTURE’
With the purchase of beef producer IBP in 2001, several new faces were added to the Tyson management roster. Sales initially boomed for Tyson Foods, but commodity prices, competition and a national recession began to weigh on the company’s bottom line. Deeply in debt, Don called the old school kids together for one last tour. 

“Don called Leland. Leland said he would come back if I would,” Wray explained of his 2008 return to the company as executive vice president-special assistant to the president and CEO. That interim CEO was Tollett. One of the first things they did was to bring Donnie Smith into the mix and prep him to become the next CEO.

Wray said there were no “major tweaks” required to get the company back to profitability. 

“I did the old walk around,” Wray said when asked how he began the process of getting the company back on its feet.

A change in culture removing some measure of authority and responsibility from key managers resulted in what Wray said is the worst thing that can happen in any business.

“They were all turtled up,” Wray said, using his body to mimic a person pulling up within a shell.

Wray told the story of a mid-level manager coming to him with a problem. Instead of responding to the manager’s request for help, Wray, who with his wife Linda are possibly the biggest fans of Razorback basketball, began to talk about sports. The manager would bring the conversation back to the problem. Wray would again talk sports. Eventually the manager presented his own solution to fix the problem. It was a good solution and it worked.

“The people were there. They could get it done. ... You just had to get them to open up,” Wray said. “We just had to back off and let them do it. We had to get back to the culture.”

The culture is back. And humming. Wray ended his second run with Tyson in February 2014. On Nov. 17, Tyson Foods blew past market expectations and posted fiscal year revenue of $37.58 billion, well ahead of the $34.374 billion in the previous fiscal year. Annual income of $864 million was up 11.05% over the 2013 fiscal year.

Wray does not back away from his belief that corporate success can be as simple as hiring the right people and giving them the tools to succeed. He also had a simple answer when asked how the college graduate of today might become a future business hall of famer. His advice was to work hard, work smart, and have fun.

“I can honestly say to you that I never dreaded, not one day, never dreaded going to work. Now, some days were more fun than the others.”

Target is saying “Adios” to Canada as the retailer announced plans to shutter its 133 stores that it opened in that market in the past two years. Insiders see it as an opportunity for Wal-Mart, who remains committed to its northern expansion.

Target's CEO Brian Cornell said Thursday (Jan. 15) when he joined the retailer five months ago he promised to take a hard look at the entire business and all of its operations in an effort to improve financial performance. 

“After a thorough review of our Canadian performance and careful consideration of the implications of all options, we were unable to find a realistic scenario that would get Target Canada to profitability until at least 2021,” Cornell said.

While Cornell notes the difficult decision, he is confident it was the right move for the company. 

“With the full support of Target Corporations Board of Directors, we have determined that it is in the best interest of our business and our shareholders to exit the Canadian market and focus on driving growth and building further momentum in our U.S. business,” Cornell added.

The company expects to report about $5.4 billion of pre-tax losses for Target Canada in the fourth quarter to write down the investment. 

Shares of TGT rose on the news which also came with a revised fourth quarter 2014 outlook. Target said it now expects fourth quarter U.S. comparable sales to rise 3%, ahead of its original guidance of a 2% rise.

The retailer cited increased traffic and online sales for the better-than expected comparable sales. Target sees fourth-quarter adjusted per-share profit of $1.43 to $1.47 a share, about 6 cents ahead of expectations for U.S. Segment performance at the beginning of the quarter.

“There were many missteps along the way for Target, starting with an overly ambitious market entry plan when it launched with 124 new stores in its first year. This led to severe inventory related issues – overstocks in some stores, poor availability in others, from which it wasn't able to recover. Having built a hugely-impressive pre-opening awareness campaign, many shoppers were left disappointed,” IGD analyst Stewart Samuel told The City Wire.

Samuel said Target’s key competitors including Wal-Mart also delivered a solid defensive play, sharpening pricing, improving stores and offering better ranges.

That said, Canada has been a battleground for retailers. Wal-Mart laid off 750 workers in that market in April 2014 as it too struggled behind laggard performance. At that time Wal-Mart said it remained committed to building out its Canadian business which it has operated for two decades.

In fiscal 2014 Wal-Mart said it would invest between $550 million and $750 million annually to build new stores and refurbish older stores in Canada. In 2014, Wal-Mart spent $750 million with 35 new supercenters and several store remodels that allow for more fresh grocery.

“Wal-Mart is likely to be interested in some of the Target Canada stores. At around 115,000 square feet, they could provide the retailer with the opportunity to operate with a smaller footprint in some locations,” Samuel said.

Last year Big Lots closed 78 Canadian stores, which it bought just two years before. The retailer blamed increasing competition amid discounters. Best Buy also hit headwinds in 2013 and opted to close 15 of its 260 stores in Canada and cut about 5% of its workforce in the country as it tried to revamp its strategy.

The U.S. Department of Commerce recently issued a report that attempts to apply numbers and definition to the assumption that Richard Florida’s “Creative Class” has a direct and dynamic impact on the U.S. economy.

Florida, who is now director of the Martin Prosperity Institute at the University of Toronto, published his “Rise of the Creative Class” in 2004 that changed the way economists, community developers, government officials and many others viewed the potential for generational change within the workforce and economy. Florida’s belief was that about 40 million Americans “create” for a living, and how they work has the potential to change workplace norms, product and service marketing and success, municipal migration gains and losses, and a host of other factors related to overall economic performance.

According to a new report from the Commerce Department, the “nominal value” of production from all “arts and cultural production” industries increased $25.8 billion in 2012, with the total impact being $698.7 billion, or 4.3%, of total U.S. GDP.

“With the creation of new data analyses like this one – which shows how arts and culture contribute to GDP – the Department of Commerce is providing a more detailed picture of what drives the U.S. economy, growth, and job creation,” Secretary of Commerce Penny Pritzker said in the statement. “Making new data available is another example of how the government is working harder and smarter to produce relevant statistics that better inform individuals, businesses, and decision-makers.”

The department also offered the following as a definition for cultural production: “Culture can be defined in a variety of ways to include: language, traditions, beliefs and values. For this account, we defined arts and cultural production narrowly to include creative artistic activity; the goods and services produced by it; the goods and services produced in the support of it; and finally the construction of buildings in which it is taking place.”

Job sectors placed in the arts and cultural production report include museum employees, landscape architects, advertising industry employees, performing artists, artist managers, sound recording, musical instrument manufacturers, publishers and graphic design workers.

Commodity output for all jobs in the sector totaled $1.1 trillion in 2012. The primary contributor to the core jobs in arts and culture was advertising with an output of $239.8 billion, and the primary contributor to the supporting jobs was broadcasting with an output of $118.4 billion.

Employment for all ACPSA industries was 4.7 million jobs in 2012.  The core ACPSA industries contributed 956,400 jobs, while the supporting ACPSA industries contributed 3.537 million jobs. The core job count is down from 1.062 million in 2007, but better than the 943,800 in 2011.

The supporting jobs are down from 3.921 million in 2007, and down slightly from 3.554 million in 2011.

The advertising industry was the primary contributor to the core employment, with 133.5 thousand jobs.  The primary contributor to supporting industries was the government sector, with 1.1 million jobs.

Following are the top five jobs in 2012 (by employment) in the core and supporting categories of arts and cultural production.

CORE
Advertising
2012: 133,500
2007: 140,000

Museums
2012: 122,300
2007: 117,400

Architectural services
2012: 102,300
2007: 144,500

Performing arts
2012: 100,100
2007: 108,600

Education services
2012: 93,300
2007: 94,600

SUPPORT
Government
2012: 1.113 million
2007: 1.178 million

Retail industries
2012: 713,800
2007: 759,000

Broadcasting
2012: 401,300
2007: 430,200

Motion pictures
2012: 367,300
2007: 364,200

Publishing
2012: 345,300
2007: 419,500

Link here for the complete report.

The residential real estate sector in Fort Smith and the surrounding area is known across the state as a mature, no-hype market. But 2014 proved to be a breakout year for the Sebastian and Crawford counties with a 14.3% rise in home sales. Residential sales were up 9.4% in Sebastian County and 31.3% in Crawford.

Total sales in Sebastian County reached $184.34 million with 1,360 homes sold last year, according to Paul Bynum, analyst with MountData.com. Unit sales rose 10.74% while average prices dipped to $114,000, compared to $115,000 reported in 2013. 

Kevin King, owner of Weichert King Realty Group, said his Fort Smith firm posted a banner year with transactions increasing 22% from the year-ago period. 

“Our sales volume was up 22% in 2014 and the agent average for the office was 15 sales. That’s not bad for a growing office. We are back to 2005 sales levels, just before the bubble began to inflate,” King said. 

He said the sales levels posted in 2014 are comfortable and sustainable, noting that there is some new growth and investment taking place around the city.

MountData reports agents across Fort Smith sold 96 homes in December with a combined value of $11.88 million. This compared to 96 sales worth $12.7 million in the same month of 2013. 

King said home prices are flat to down slightly from a year ago, because there is still investor activity in the market, especially at the low price end.

“Investors do not have the emotional attachment to the properties and they tend to bid lower and walk away rather than bid up to get a property that will turn into a rental,” King said.

Sebastian County’s median home price per square foot in 2014 was $68.50, just 50 cents lower than in 2013, and $1.20 less than reported in 2012.

Clif Warnock, broker with Warnock Real Estate, recently said there were more higher prices homes sold throughout the fall months which had pushed up the average sales prices from 2013.

“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,” Warnock said.

CRAWFORD COUNTY
Crawford County agents sold 635 homes worth $75.114 million last year. Unit sales climbed 22.8%, while total volume rose 31.13% year-over-year, according to MountData.com.

Warnock said the Crawford County market provides a 15% value in prices over neighboring Fort Smith, which keeps activity steady.

“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 others moving to Fort Smith would consider the Van Buren market,” Warnock said.

Crawford County agents had a big month in December with 53 sales tallying $6.034 million combined. Unit sales rose 20% while volume jumped 38% over the same month in 2013.

For the year, the median sales price in Crawford County was $67.70 per square foot, up from $67.10 in the prior year. The median square-foot price is 80 cents cheaper than in Sebastian County and $20.3 cheaper than in neighboring Washington County, according to MountData.com

2015 OUTLOOK
Warnock and King expect 2015 sales to be similar, growing slightly in volume and units as consumer confidence is up and unemployment is down.

King said the reduction in mortgage insurance premiums is timely to help offset what is expected to be higher interest rates by the end of 2015. 

“Three predictions I have heard recently is that interest rates will be 5% by the end of 2015, (with) most of that move coming in the back half of this year,” King said.

While 5% is historically a low mortgage rate, it is considerably higher than 3.5% to 4% rates now available.

Recent changes in the Federal Housing Administration’s mortgage insurance premium rates is seen as a help to homeowners who will secure FHA loans after Jan. 26. This is the first reduction after several increases that followed the housing bubble crash. For the majority of buyers, the rate will reduce from 1.35% of the loan amount to 0.85%, a pretty hefty reduction. The upfront mortgage insurance premium, however, remains unchanged at 1.75%. 

For FHA backed mortgage loans, buyers pay the upfront mortgage insurance premium at closing, plus an annual mortgage insurance premium that is spread out through monthly mortgage payments.
Using the median home prices at the end of 2014, The City Wire calculated the monthly savings created from the rate reduction.

Sebastian County has a median home price of $114,000. With a 3.5% downpayment the mortgage amount would be $110,010. Under the 1.35% rate the annual premium is $1,485, or $123.76 per month.  

Under the new 0.85% rate, the annual premium would be $935 or $77.92 per month, a savings of $45.93 per month.

In Crawford County with a median price of $109,700 the annual premium goes from $1,429 to $899.81 for a monthly savings of $44.

King said the majority of home loans made in Fort Smith are conventional, and not FHA, but when FHA is used the new rate will help borrowers’ dollars go further. In Crawford County there is still wide use of the 100% Rural Development loans, but FHA is also a common option for buyers with less-than-perfect credit scores.

FORECLOSURE WRAP
There were 86 properties in Crawford County that had foreclosure filings made against them in 2014. Foreclosure filings fell 48.4% from 2013 and they were down 11.34% from 2012, according to Irvine, Calif.,-based RealtyTrac.

There were 120 properties in Sebastian County with foreclosure filings. The pace was slashed in half from 2013 as filings were down 54.3%. This came on top of a 25.5% drop in 2012. 

King said the Fort Smith market tends to lag about six months to one year behind the nation in foreclosures.

“We still have a few of them working their they way through but the amount grows smaller each year. With unemployment much lower today I don’t expect to see foreclosures as a threat in the Fort Smith market,” King said.

HOME SALES SUMMARY
Crawford County
Unit Sales
2014: 635 
2013: 417
2012: 502

Sales Volume
2014: $75.114 million
2013: $57.193 million 
2012: $60.179 million

Median Sales Price
2014: $109,700
2013: $105,000
2012: $112,500

Sebastian County
Unit Sales
2014: 1,360
2013: 1,228
2012: 1,114

Sales Volume
2014: $184.340 million
2013: $168.436 million 
2012: $153.011 million

Median Sales Price
2014: $114,000
2013: $115,000
2012: $117,000

No two words could define this year’s legislative session more than these: “private option.”

The program, which uses Medicaid dollars to purchase private health insurance through the Affordable Care Act’s state insurance exchange, first was passed by the Legislature in 2013 and then was reauthorized in 2014. More than 200,000 Arkansans have health coverage because of it, and the state is receiving $1.3 billion in federal funds this fiscal year. But opponents fear that long-term costs are unsustainable. It’s still unknown if supporters have the votes to continue it.

Talk Business & Politics has prepared a “private option primer” to break down some of the numbers behind the controversial program.

THE ENROLLEES
How many people are enrolled through the private option?
As of Nov. 30, 2014, there have been 213,200, according to Amy Webb with the Arkansas Department of Human Services. Of those, 25,117 were deemed to be “medically frail” and were steered into traditional Medicaid.

What are the incomes of recipients?
81% have incomes below the federal poverty line, while 19% have incomes above 100%. The federal poverty level is $16,105 for an individual and $32,913 for a family of four.

What are the demographic characteristics of enrollees?
67% are ages 19-44, while 33% are ages 45-65. 58% are female, and 42% are males.

How many were previously uninsured?
Unknown.

What percentage are employed in a full-time or part-time job or are students?
Unknown.

What percentage have no income?
In November, 80,000 people had no income that is counted for eligibility, which would exclude sources such as child support. Webb says DHS is examining the data more closely to determine more of the characteristics of private option recipients.

How has the private option affected Arkansas’ ranking for uninsured residents nationally?
A Gallup poll released last summer found that Arkansas had the nation’s steepest drop in its uninsured rate – from 22.5% in 2013 to 12.4% in 2014. Almost half of Arkansans who were not insured in 2013 are now insured, according to the survey. Arkansas’ insured rate in 2013 had ranked it next to last nationally, just ahead of Texas.

THE MONEY
How many federal dollars are coming into Arkansas in fiscal year 2015 because of the private option?
$1.3 billion in federal funds, Webb said.

What is Arkansas’ responsibility?
The federal government pays for all program costs through Medicaid until calendar year 2017, when Arkansas is responsible for 5% of the cost. The state’s responsibility increases over time to 10% by calendar year 2020.

The administrative costs for the private option are estimated to be about $2 million, along with the cost of administering Health Independence Accounts, which are explained below.

According to Webb, the state saves $55 million in state general revenue funds by eliminating or reducing traditional Medicaid eligibility categories requiring a 30 percent match. She said the state is also saving about $33 million on uncompensated care at several agencies, including UAMS and the Department Corrections.

What are the average premiums?
The total average monthly cost per member at the end of the first year, including premiums, was $489.85. Insurance carriers are limited in the amount of profits they can keep over medical expenses paid, which is also known as the medical loss ratio. Those whose profits are too high will be required to return money to the Medicaid system, a process known as reconciliation. When that happens, the average monthly cost per member should be reduced.

How does this compare to projections?
Projections by year were:
Year 1 – $477.63
Year 2 – $500.08
Year 3 – $523.58

At the moment, actual premiums are above projections. What does that mean?
If costs were to remain above projections, Arkansas would be in danger of losing the federal waiver that allowed the creation of the private option in the first place. The Department of Human Services could request adjustments to premium limits based on factors such as the average age of enrollees being higher than projected. Webb said the department did not request that adjustment because premium rates are falling and because of policy decisions that are likely to result in lower costs, including changes to the non-emergency transportation program.

What has been the effect on Arkansas hospitals?
The Arkansas Hospital Association released a study in 2014 showing that Arkansas hospitals had a reduction of $69.2 million in uncompensated care during the first six months of 2014 compared to the same time period a year earlier. The study found that the number of hospital visits by uninsured patients fell 46.5% – from 9,180 admissions of uninsured patients out of 135,552 total visits in the first six months of 2013 to 4,913 hospital admissions out of 136,436 total visits during the first six months of 2014. Overall hospital admissions rose 0.7%. Uninsured emergency room visits were reduced 35.5 percent, while total visits rose 1.8%. The number of non-urgent hospital outpatient clinic visits increased 5.8%, while the total number of uninsured outpatient visits fell 36%.

THE POLICIES
What consumer-driven health care reforms have been enacted?
The latest federal waiver allows Arkansas to establish Health Independence Accounts (HIAs). Enrollees earning more than 50% of the poverty level contribute up to $15 per month to an account, based on their income level, that can accumulate up to $200. That account pays enrollees’ co-pays while they participate in the private option. If an enrollee’s income increases and he or she shifts to marketplace coverage, up to $200 can be used for private coverage costs. The cost for the contract for the HIAs is about $6 million, split evenly between the state and federal government. The 37,000 enrollees with incomes above the poverty level received their “myindy” cards this month. Another 60,000 enrollees with incomes between 50-100% soon will begin receiving educational materials about the program and are expected to start participating this summer. Once they are included, the contract’s cost will be about $12 million. The waiver also will limit nonemergency medical transportation trips for private option enrollees to eight per year.

What other consumer-based reforms have been enacted?
DHS is now requiring co-payments for enrollees with incomes that are 50% of the federal poverty level and higher. Previously, enrollees below 100% were not required to share in the cost.

Are there any other consumer-based reforms that have gone through the approval process and are simply waiting to be enacted?
Enrollees in ARKids First B are being transitioned to private coverage. So are parents with incomes at or below 17 percent of the federal poverty level. Previously, they were placed into the traditional Medicaid coverage along with disabled and aged adults.

A so-called “web-cam abortion bill” was filed Thursday with supporters expecting a committee hearing on the bill sometime in the near future, its sponsor said.

State Rep. Julie Mayberry, R-Hensley, submitted House Bill 1076, which has 38 co-sponsors in the House and 17 co-sponsors in the Senate. It is described as an “act to regulate the use of certain drugs used to induce an abortion, to define certain terms; to provide for disciplinary proceedings for abortions performed in violation of this act; to provide a civil cause of action for violations of this act; to require physician reporting and for other purposes.”

Mayberry said a similar bill was filed during the 2013 session, but did not receive a committee hearing. According to the text of the bill, it would require doctors and other personnel to be in the room when an abortion procedure is done.

“When mifepristone or another drug or chemical is used to induce an abortion, the initial administration of the drug or chemical shall occur in the same room and in the physical presence of the physician who prescribed, dispensed or otherwise provided the drug or chemical to the patient,” the bill reads.

The bill would also require a doctor or “a person acting on behalf of the physician who induces the abortion, shall make all reasonable efforts to ensure that the patient returns 12 to 18 days …. for a follow-up visit.”

The bill also allows the Arkansas State Medical Board to revoke the license of a doctor who violates the rules of professional conduct by performing an abortion in violation of the law; as well as allows the woman and other family members to seek civil damages if the law is broken.

Mayberry said similar bills have been passed in 17 states and only challenged in one state. Supporters added the word “initial” on the doctor part of the bill to help allay constitutional concerns, Mayberry said.

According to published reports, groups like Planned Parenthood have objected to bills like this, especially the telemedicine issue, saying it violates the 1973 Supreme Court ruling in Roe v. Wade by limiting a woman’s right to an abortion.

The group opposed a similar law in Iowa that passed that state’s legislative last year. A circuit judge there found the law constitutional last August, but was overturned by the Iowa Supreme Court last September.

Mayberry said the “telemedicine” type of abortion is not being done in Arkansas “to my knowledge.”

“However, it is much easier to try to stop something before it starts,” she said.

The bill was referred Thursday afternoon to the House Public Health, Welfare and Labor committee. A similar bill, Senate Bill 53, was also filed Thursday by Sen. Missy Irvin, R-Mountain View. That bill was also referred Thursday to the Senate Public Health, Welfare and Labor committee.

Mayberry said the issue is important to her and the state’s Right to Life committee, which is hosting a march Sunday in Little Rock. Gov. Asa Hutchinson will headline the march.

“My husband, Andy, was also a state legislator and he was the lead sponsor on the 20-week law,” Mayberry said. “There are some who say it is a ‘War on Women.’ But I think it is ironic that two women who have sponsored the bills.”

Mayberry said she is hopeful that the bill can bridge differences in both camps.

“For me, protecting life is a top priority. For someone who does not see it like me, that it is the woman’s life, (with the bill) at least we can try to make the procedure safer,” Mayberry said.

Other bills referred to committee Tuesday were House Bill 1074 and House Bill 1075.

HB 1074, sponsored by Rep. Kim Hendren, R-Gravette, would seek to prohibit a school board from “acquiring, holding, buying, renting or leasing real property located outside the boundaries of the school district.” The bill was sent to the House Education Committee.

HB 1075, sponsored by the Joint Budget Committee, is the appropriation bill for the Arkansas Development Finance Authority for the 2015-2016 fiscal year. ADFA administers funding using tax exempt bonds and other funding to help economic development, homeownership and affordable rental housing programs in the state.

COMMITTEES
The House Education Committee approved three bills by voice vote. State Rep. Nate Bell, R-Mena, who sponsored House Bill 1011, said the bill came after he heard from a constituent about an issue. The constituent, who scored 35 on the ACT test, is a member of the Latter Day Saints church. The church requires a year-long mission trip after graduation and that the student was willing to walk away from the scholarship, Bell said.

Bell told the committee that most scholarship programs managed by the Department of Higher Education, other than the Governor’s Distinguished Scholars program, have provisions to accommodate similar issues.

Higher Education Director Shane Broadway told the committee that the department tries to work with students who face similar issues and that there was no opposition to the change. The bill would give the Department of Higher Education the authority to approve a scholarship hold for up to two years.

The bill now heads to the House floor.

The committee also approved House Bill 1014, sponsored by House Speaker Jeremy Gillam, R-Judsonia. The bill would exempt state institutions, political subdivisions and any other applicable entities with tort liability immunity from the requirement to obtain general liability insurance coverage when obtaining a child care facility license.

The committee’s chairman, Rep. Bruce Cozart, R-Hot Springs, also sponsored House Bill 1002 which was approved. The bill congratulated the Arkansas School for Mathematics, Sciences and the Arts for being ranked number 10 in the country by the Daily Beast in its 2014 survey of America’s Top High Schools.

NEW BILLS
The following major House bills were also filed Thursday:
House Bill 1080 (State Rep. Dan Douglas, R-Bentonville) – to protect the integrity of ongoing academic research and studies; and to create an exemption to the Arkansas Freedom of Information Act of 1967).

House Bill 1079 (State Rep. Justin Harris, R-West Fork) – concerning the use of an unmanned vehicle or aircraft that captures images, to create the criminal offenses; to provide for civil liability.

House Bill 1078 (State Rep. Gary Deffenbaugh, R-Van Buren) – to allow a member to change his or her beneficiary upon the occurrence of certain events; to allow the Arkansas Teacher Retirement System to be consistent and to declare an emergency.

House Bill 1077 (State Rep. Charlie Collins, R-Fayetteville) – concerning the possession of a concealed handgun in a university, college or community college building.

House Resolution 1003 (State Rep. Scott Baltz, D-Pocahontas) – to honor veteran William J. Strauss for his military service during World War II.

Both the House and Senate will not be in session Friday. Both chambers are also off Monday in observance of the Dr. Martin Luther King Jr. and Gen. Robert E. Lee holidays.

The House and Senate will reconvene at 1:30 p.m. Tuesday in Little Rock.

Change has been a theme at Bentonville-based Wal-Mart Stores under the new leadership of CEO Doug McMillon who took the helm almost a year ago. Executives continue to come and go from the retail giant, particularly in the flagship U.S. division.

John Aden, executive vice president of sales innovation, will be exiting the retailer on Jan. 31 to pursue other opportunities. Aden served in numerous leadership roles across the business, including U.S. merchandise services, small formats, general merchandise  as well as the international operations and leverage teams. 

Aden also served on the board of Walmart’s India joint venture and he led the retailer’s early efforts in Africa. 

McMillon has approved several personnel moves which Walmart U.S. CEO Greg Foran shared in a corporate memo on Friday (Jan. 16). The City Wire obtained the memo which outlines the management shifts. Foran will take on a dual role of CEO and chief merchandising and marketing officer following the departure of Duncan Mac Naughton. Mac Naughton was once considered to be the next Walmart U.S. CEO.

Foran has made no secret about his plans to whip the U.S. business into shape. Major areas of focus include: improving fresh format, reducing inventory and boosting on-shelf availability numbers while also fostering a more seamless e commerce integration in the 4000-plus U.S. stores.

“As an organization, Walmart U.S. is very proud that several of our leaders were selected. It’s a strong testament to the great talent and expertise we have on this team,” Foran noted in the memo.

Jane Ewing, senior vice president, business development for Walmart U.S., will lead the “Next Generation Stock-up” work group, Foran said. She is joined by Jeff McAllister, senior vice president of Walmart Innovations, who will lead the “Next Generation Supply Chain” group, and Latriece Watkins, senior vice president, snacks and beverages at Walmart U.S. will lead the “Ways of Working” group.

“I’m very excited to see what Jane, Jeff and Latriece will bring to their new roles,” Foran said.

Other moves include Laura Phillips, senior vice president of entertainment, who is moving to “Omni-Channel Assortments” where she will retain the role of vice president.

Foran said in the new role Philips will support the company’s enterprise strategy leading the “Compelling Merchandise” group where she will help capture market share in key categories by utilizing the company’s physical stores and e-commerce assets. Phillips will report to Andy Barron, executive vice president for softlines at Walmart U.S. 
(Softlines include apparel, linens, footwear and accessories.)

With Phillip’s move, Greg Hall, senior vice president of hardlines, has been named senior vice president of entertainment at Walmart U.S., reporting to Barron. (Hardlines include home furnishings, electronics, jewelry, and sports equipment.)

Hall first joined Walmart in 2005 as director of marketing for entertainment. He then worked as vice president of marketing at Walmart.com, and vice president of  entertainment and U.S. manufacturing and sourcing, before being promoted to this position.

Foran also welcomed back Terry Price to fill Hall’s former role in Hardlines. Price is also reporting to Barron. Price was previously a 22-year associate, who began his career in store operations and held several executive roles within Walmart U.S. and Asda before leaving in 2003. Price recently worked at Tesco Stores as their CEO of general merchandise for the U.K. and central Europe, as well as their chairman of Dobbies Garden Centers.

Also noted in the memo was the retirement of Bryan Miller, senior vice president of Human Resources for Walmart U.S. MIller’s last day is Jan. 31.

About 40 people gathered Friday night (Jan. 16) in Fort Smith for the first official meeting of a group – Take Back the Fort 2015  – to collectively discuss their plans to begin a petition drive in early February for the purpose of changing the form of government in Arkansas’ second largest city.

The meeting, held in the community room of the Fort Smith Police Department, was directed by Don Paul Bales, the former Fort Smith police officer who was fired and is now suing the department to get his job back.

Bales said the “simple” goal of Take Back the Fort 2015 is to change the form of government so the person directing the city’s daily business is elected by and accountable to voters. Fort Smith’s city administrator form of government has a city administrator who is hired and fired by the seven-member elected Board of Directors. Fort Smith has a mayor, but the position is largely ceremonial, with the primary duty to preside over Board meetings.

“It’s not to pick on (Fort Smith City Administrator) Ray Gosack ... but it’s (the job) not accountable to the voting community,” Bales said. “That is simply the whole point of what we’re trying to do.”

Matt Campbell, Bales’ attorney in his suit against the city, is also providing legal advice to the group and was at the Friday meeting. He confirmed that 2,517 signatures are needed to get a change-of-government question on a city ballot. However, the group also wants to change the government so that the city attorney and city clerk are also elected. Legal technicalities related to those changes require a 90-day period, which essentially makes it difficult for the change of government vote on be on a planned May 12 city election. That election has been scheduled for renewal of the city’s 1% sales tax dedicated to streets, bridges and associated drainage.

Bales and several members of the group expressed confidence that they would be able to quickly gather the signatures. Bales said several times it is important that the group work with a single voice and goal “and not get drawn into a dogfight on a single issue.” He said those opposed to changing the form of government will work to “undermine” their efforts and “spin and twist” what they say to confuse the issue.

Bob Newbold, one of the leaders in the successful citizen effort to overturn in November 2011 the city’s effort to implement a prepared food tax, agreed with Bales about the issue being a political battle.

“I’m just telling you, you’re fighting a machine,” Newbold said of the city.

Bales said it is important for those in the group to raise money in order to get the message out. Former City Director Velvet Medlock Barrows told the group she is already working to collect money for the effort.

However, Campbell told The City Wire that the group has yet to set up a legal identity with the Arkansas Ethics Commission to begin collecting money for the ballot question effort. He said he planned to contact commission officials on Monday and make that happen.

The group plans to begin soliciting signatures in early February. They scheduled a meeting for Jan. 30 – tentatively set for 6 p.m., at the main branch of the Fort Smith Public Library – to review an organizational chart of form of government they want voters to approve. Bales said the group will also discuss and finalize other details at that meeting.

City Director André Good, who attended the meeting, was impressed with what he heard and was surprised by the number who attended.

“The presentation was very professional. ... And it was very obvious to me that the presenters did their homework,” Good said after the meeting.

He said the chances are “very, very high” that the group will get enough signatures to force an election. He is unwilling to predict the results of the election, other than to say “it will be very tight.”

“You will see some important groups, groups on both sides, and people with a lot of influence, really come out on this,” Good said.

Arkansas’ severance tax collections hit a record for the month of December, but plummeting natural gas prices and declining rig counts could threaten the state’s incredible run of good fortune and production in the Fayetteville Shale, recent industry reports show.

Gross natural gas severance tax revenue during December rose a whopping 81% to $7.8 million compared to $4.3 million a year ago. For the three month period ended Dec. 31, 2014, collections were up 41.6% from $14.1 million for the same quarter of fiscal 2013, according to tax data compiled by the Revenue Division of the Arkansas Department of Finance & Administration.

The monthly and quarterly totals are a record for those respective periods, as new drilling techniques and high well production continues to fill state tax coffers. At the end of fiscal 2014, which officially ended on June 30, 2014, severance tax collections in Arkansas reached an all-time high of $77.3 million. That pace has continued through the first six months of fiscal 2015 with collections at an all-time high of $44.8 million at the halfway mark.

However, there are signs at the wellhead that weakening commodity prices are causing some shale producers to reduce capital spending on oil and natural gas drilling.

There were 1676 rigs in use across the continental U.S., down 74 from a week ago and 101 fewer rigs than were operating at the same time a year ago, according to Baker Hughes’ weekly rig count. In Arkansas, the state’s rig count last week fell from 13 to 11. Both of the rigs taken out of use came in the Fayetteville shale, where the rig count is now down to single digits at nine.

FAMILY FUEL SAVINGS
Meanwhile, the U.S. Energy Information Administration’s (EIA) new short-term forecast doesn’t show much improvement for natural gas and crude oil prices in 2015. The Energy Department’s statistical arm forecasts that Brent crude oil prices will average $58 per barrel (bbl) in 2015 and $75/bbl in 2016, with annual average West Texas Intermediate (WTI) prices expected to be $3 to $4 per barrel below Brent.

Driven largely by falling crude oil prices, U.S. weekly regular gasoline retail prices averaged $2.14 per gallon on Jan. 12, the lowest since May 4, 2009. U.S. regular gasoline retail prices are projected to average $2.16 a gallon in the first quarter of 2015. EIA expects U.S. pump prices, which averaged $3.36 per gallon in 2014, to average $2.33 per gallon in 2015.

“The average household is now expected to spend about $750 less for gasoline in 2015 compared with last year because of lower prices,” the Energy Department said.

For natural gas, the EIA expects the Henry Hub spot prices to average $3.44 per million British Thermal units (MMBtu) in 2015, compared with $4.39/MMBtu in 2014. In trading today on the New York Mercantile Exchange, light, sweet West Texas crude was down 14 cents to $48.55. Natural gas was down 12 cents at $3 per MMbtu. 

SOUTHWESTERN MAY REDUCE FAYETTEVILLE SHALE PLANS
On Friday, in a report on Fayetteville Shale leader Southwestern Energy Corp., Fitch Rating service noted that spot natural gas prices at Henry Hub, La., have come under pressure because of “better than expected supply response in 2014 following the polar vortex and relatively mild start to winter.”

“(Southwestern) management has indicated that it could scale back its near-term capital plan to approach free cash flow neutrality by reducing/eliminating its exploration efforts, rationalizing Fayetteville drilling activity, and, if necessary, moderating southeast Appalachia development efforts,” the report said.

Southwestern Energy recently announced that its capital spending program in 2015 will jump slightly to $2.6 billion, compared to $2.4 billion in 2014. The Houston-based low-cost natural gas driller has shifted the lion’s share of its capital program from the Arkansas shale to the company’s oil and gas liquids plan in the Marcellus and Utica share plays.

In December, Southwestern completed a $5 billion deal to acquire a huge stake in Chesapeake Energy’s oil and gas assets in West Virginia and southwest Pennsylvania. Of its $2.6 billion capital budget, Southwestern plans to spend only $755 million in the Fayetteville Shale, down $145 million from a year ago. The Houston driller’s capital budget for the Marcellus and Utica shale plays will nearly double to $1.4 billion.

And although Fitch expressed concerns that the “aggregate scale” of the recent transactions was uncharacteristic of Southwestern, the rating’s service said the recent deals reflected the current size and growth of the company and the increasing competitiveness for attractive, but limited shale assets in the U.S.

“Fitch views the transactions as complementary to the company's other assets in the Marcellus Basin and recognizes it provides management with an opportunity to apply its operating expertise to maximize development and production efficiencies in an attractive, lower risk position,” the report said. “Fitch believes the acquisitions make strategic sense from an asset, production, operational, and growth prospective.

Despite the current BBB- credit rating of Southwestern’s senior unsecured debt, Fitch maintained its rating outlook on Southwestern as “stable,” noting that the company’s “credit conscious financial policy and strong operating history that has resulted in the achievement of drilling efficiencies and competitive production (profile).”

Improved economic conditions and stable air fare rates in 2014 helped the Northwest Arkansas Regional Airport (XNA) set a new enplanement record, and helped the Fort Smith Regional Airport post an almost 10% enplanement gain.

Gains at XNA and Fort Smith were better than the national trend. Between January and October (the latest data provided by the U.S. Department of Transportation), there were 64.717 million domestic enplanements, up 3.34% compared to the same period in 2013.

XNA ended 2014 with 640,537 enplanements, up 10.15% over 2013, and more than the record of 598,886 enplanements in 2007. The 2014 gain also marked the third consecutive year of increased traffic at the airport.

For all of 2013, XNA enplanements totaled 579,679, up 2.58% compared to the same period in 2012. 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.

Enplanements at the smaller commercial airport in Fort Smith totaled 92,869 in 2014, up 9.87% compared to 2013.

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

Increased holiday air travel could have helped XNA and the Fort Smith airport end the year on a positive note. Airlines for America, the trade group for most U.S. airlines, predicted that 45 million Americans would travel by air during the winter holiday travel, up 2% over the 2013-2014 period.

December enplanements at XNA totaled 49,057, up 7.6% compared to December 2013. The Fort Smith airport had 7,409 enplanements in December, up 9.5% compared to December 2013.

“As more customers take to the skies this holiday season, travelers will continue to benefit from the significant investments U.S. airlines are making – to the tune of more than $1 billion per month – into amenities at the airport and in the skies that further enhance the travel experience,” said John Heimlich, vice president and chief economist for Airlines for America.

LITTLE ROCK DECLINE
The Bill & Hillary Clinton National Airport in Little Rock is likely to be the only one of Arkansas’ largest commercial airports to not post an enplanement increase in 2014. Through November, the airport had 956,016 enplanements, down 4.64% compared to the same period in 2013. (The airport did not have December data available as of Jan. 19).

Little Rock 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.

Standard & Poor’s Rating Services recently affirmed its “A” rating on outstanding revenue bonds issued for the Little Rock airport. The financial outlook continues to be stable for the two- year rating period. S&P noted in its report that the airport has posted consistently improved financial profile despite declining enplanements. A concern noted by the ratings agency was that the population of the airport’s service area limits enplanement growth to economic growth in central Arkansas. S&P said airline mergers and route restructuring were to blame for enplanement declines.

ENPLANEMENT HISTORY (Fort Smith Regional Airport, since 2000)
2014: 92,869
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)
2014: 640,537
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

A bill has been filed that would require all executive sessions to be recorded, with copies provided to the prosecuting attorney’s office for review. Prosecutors will oppose it as written because it would add too much work to their offices.

House Bill 1054 by Rep. Nate Bell, R-Mena, would require any “governing body, board, bureau, commission, or organization” that conducts an executive session to record the session, retain that copy for a year, and provide a copy to the local prosecuting attorney. The prosecutor or a designee would be required to review that recording to determine if Arkansas law was violated. The designee could be an individual or a review panel of three to five persons meeting to review one or more recordings.

The Arkansas Freedom of Information Act (FOIA) states in part, “Executive sessions will be permitted only for the purpose of considering employment, appointment, promotion, demotion, disciplining, or resignation of any public officer or employee. The specific purpose of the executive session shall be announced in public before going into executive session.”

Bell said that, because what happens in executive sessions can’t be verified, his evidence that they are being abused is anecdotal. He said one quorum court not in his district has a recent history of holding long executive sessions and short open meetings.

“The bill is aimed at creating a chilling effect on something that I’ve received a lot of citizen complaints on, and that is use of executive session to take up issues that are outside the scope of what is permitted in executive session,” he said.

The bill would add far too many responsibilities to prosecutors’ offices, said Larry Jegley, prosecuting attorney for the 6th Judicial District and vice president of the Arkansas Prosecuting Attorneys Association. As the prosecutor for the district that includes Pulaski County, Jegley’s office would be responsible for executive sessions that would occur during many state government meetings.

“I haven’t finished polling the other 27 elected prosecutors, but I’d be shocked if any of the 28 elected prosecutors would be in favor of the bill as written,” he said. “We’ve not had a chance to visit with Rep. Bell about our concerns, but obviously they will revolve around logistics and staffing, time and funding issues.”

Jegley, a prosecutor since 1991, said he has not seen evidence that abuse of executive session is a serious problem.

“A mechanism like this particular bill would divert a herculean amount of resources from all 28 prosecutors’ offices, and I’m just not sure that that’s necessary at this point,” he said.

Bell believes volunteers could be found to listen to the recordings and said he is willing to consider changes.

“The mechanism is a means to an end. … If somebody has a better mechanism, I am totally open to listening to a better idea to accomplish the goal of the bill,” he said.

Under the terms of the bill, the recording can be erased or destroyed following the review. Correspondence between the prosecuting attorney and the designee would be exempt from disclosure, and a designee who discloses information would be guilty of a Class A misdemeanor and not immune from civil liability.

“That’s one of the reasons why I selected going to the prosecutors is because their activities are mostly FOIA-exempt,” Bell said.

The bill has been referred to the House State Agencies and Governmental Affairs Committee, which Bell chairs.

“Right now I would say I have my work cut out for me on passage,” he said. “I have several organizations that have indicated within the next few days that they will be publicly announcing their support. Should that happen, I think it helps us gain some synergy and get it done.”

When Springdale-based Tyson Foods holds its annual shareholders meeting Jan. 30, the company will also mark 80 years of continued business in one form or another. This milestone is thanks to a Tyson family decision in 1957 to grow their business instead of accept a buyout offer from Swanson. (Swanson, by the way, would sell to Campbell foods in April 1995.)

The Tyson family opted to build a processing plant in 1958, and from that decision the company became one of the world’s largest food companies with $37.58 billion in annual sales last year.

Tyson Foods founder John W. Tyson began hauling live chickens for sale to Kansas City, St. Louis and Chicago in 1935. His son, Don Tyson, who ran the company for nearly five decades credited Tyson Foods’ earliest origins to his father’s live chicken hauls to midwestern markets as far north as Chicago.

The Tyson family incorporated in 1947 as Tyson Feed & Hatchery and they took the company public in 1963 changing the name to Tyson Foods, issuing 100,000 shares at $10.50 on the public offering. Since that time Tyson Foods has grown its market cap from $1 million to roughly $16 billion.

Don Tyson died in January 2011 at 80 years old. One of his closest friends Buddy Wray told The City Wire last year that Don Tyson would be very proud of how the company has grown. Wray said the former Tyson CEO and chairman would approve of how it’s being run today as it continues to digest the $8.5 billion recent acquisition of Hillshire Brands.

EARNINGS PREDICTION
Tyson Foods shareholders have done well amid the Hillshire Brands purchase as share prices have climbed back above the $40 level after dipping as low as $34 per share when the Hillshire bidding war began to heat up in the spring of 2014.

Wall Street analysts expect Tyson Foods to report solid first quarter earnings of 74 cents per share, up slightly from the 72 cents earned in the year-ago period. The 2015 first quarter estimates range from 65 cents on the low end to 77 cents per share on the high end.

Revenue is expected to come in at $10.29 billion, a 17.5% gain from a year-ago thanks in part to the Hillshire Brands acquisition. Tyson Foods will report its first quarter earnings on Jan. 30, ahead of the market opening.

SHAREHOLDER CONCERNS
The shareholders meeting will convene the same day at 10 a.m. at the Northwest Arkansas Convention Center in Springdale. While shareholders are expected to benefit from continued company growth in 2015, not all of them are happy with the company operations. Three separate shareholder proposals have been filed and are noted in the company’s Proxy filing with the Securities and Exchange Commission.

Shareholder Proposal No. 1 asked for a policy to address water impacts of business operators and suppliers. The shareholder asked the company to implement a water stewardship policy that will improve water quality for all the company-owned facilities and those under contract to Tyson Foods.

Tyson Foods’ board does not believe this proposal is in the best interest of the company or its shareholders citing numerous initiatives already in place that address water conservation.

Proposal No. 2 strikes at the heart of the dual stock system at Tyson Foods that allows restricted Class B shareholders, the Tyson Family, to get a 10-to-1 voting advantage over the Class A shares. Proposal No. 2 asks the board to give each shareholder an equal vote.

The Tyson family trust owns 99.98% of the class B shares and through the limited partnership control 72% of the Tyson Foods total votes, according to the Proxy proposal. The shareholders point out that the family — a select few — controls the company regardless of what might be best for the shareholders at large.

Tyson’s board, which is comprised of two Don Tyson heirs, is against this proposal. The company notes that the dual-stock system has been in place since Tyson Foods was incorporated. Tyson said investors are aware this structure in place and there are no plans to move away from it. The board also notes that strong leadership and vision from the Tyson family has helped to propel the company to its success.

Proposal No. 3 involves asking asking the company to prepare a report on its use of Palm Oil and its efforts to source that commodity in a sustainable manner. This shareholder group wants to see the report by May. 1.

The group notes that Tyson competitors such as Hormel, ConAgra and General Mills have already announced commitments to eliminate deforestation and human rights violations from their palm oil supply chain and to regularly report on their progress.

The board said it is against this proposal citing that it “only purchases palm oil-containing raw materials from suppliers who are members of the Roundtable on Sustainable Palm Oil, a multi-stakeholder organization working worldwide to ensure that palm oil production is economically viable, environmentally appropriate and socially beneficial.”

Tyson said the company purchased less than 19 million pounds of palm oil in fiscal year 2014 (which is less than 0.02% of worldwide output based on the most recent available data) and it is committed to the sustainable and responsible development of agricultural resources, including palm oil.

OTHER BUSINESS
Tyson shareholders will also elect their board of nine directors at the annual meeting.
• John Tyson, 61, chairman of the board and grandson of the founder
• Kathleen Bader, 64, former president and CEO of NatureWorks
• Gaurdie Banister Jr., 57, CEO of Aera Energy, a $5 billion oil and gas producer jointly owned by Shell and ExxonMobil
• Jim Kever, 62, is the founding partner of Voyent Partners, an investment partnership founded in 2001
• Kevin McNamara, 58, is the founding principal of McNamara Family Ventures, a family investment office providing venture and growth capital to health care companies
• Brad Sauer, 55, retired, served as executive vice president, 3M Industrial Business
• Donnie Smith, 55, president and CEO Tyson Foods appointed to that position in November 2009
• Robert Thurber, 67, retired, served as vice president of purchasing for Sysco Corporation from 1987 to 2007
• Barbara Tyson, 65, served as vice president at Tyson Foods until 2002, after which she became a consultant to the company through 2011.

The board had 15 positions during 2014. Board members were paid annual stipends ranging from $82,500 to $130,626. The pay relates specifically to the number of meetings attended and the committee duties on which they serve.

RELATED PARTY TRANSACTIONS
The Proxy filing also noted two agreements that Tyson Foods has during 2014 that involved insider relationships.

Tyson Foods has lease agreements with wastewater treatment plants that service the company’s chicken processing plants in Nashville and Springdale, Ark. These water treatment plants are owned by the Donald J. Tyson Revocable Trust of which John Tyson, board chairman, is a trustee. The Berry Street Waste Water Treatment plant is owned by the Tyson Limited Partnership benefiting John Tyson and his three sisters, Carla Tyson, Cheryl Tyson and Joslyn J. Caldwell-Tyson.

The Tyson family partnership and trusts were paid $750,000 for the lease in Nashville and $450,000 in Springdale.

On Nov. 14, 2013, Tyson Foods purchased a 9.82 acre parcel of land adjacent to the company’s headquarters in Springdale for $550,000 from JHT, LLC, of which the Donald J. Tyson Revocable Trust and the Randal W. Tyson Testamentary Trust are the members and John Tyson is the manager. The land is to be used for expansion of the corporate office complex.

With student and program growth at Arkansas’ leading universities capture most of the headlines, one may be forgiven for not knowing of the almost 33% enrollment growth and the broad expansion of workforce related education programs since 2010 at the Ozark campus of Arkansas Tech University.

Bruce Sikes, the chancellor of ATU-Ozark, credits former ATU-Ozark Chancellor Jo Blondin, the leadership at Arkansas Tech University’s main campus in Russellville and leaders in and around Ozark for much of the campus growth. Blondin resigned in early 2013 to accept the presidency at Clark State Community College in Springfield, Ohio.

Fall enrollment at the campus has grown from 1,636 in 2010 to 2,172 in 2014, up 32.7%. From 2006 to May 2014, enrollment at ATU-Ozark has increased more than 560% and more than 17 new academic and technical programs have been added. In fall 2012, enrollment at ATU-Ozark rose above 2,000 students for the first time.

The second decade of the century opened with the completion of the $1.73 million Alvin F. Vest Student Union on the ATU-Ozark campus. The facility, opened in September 2010, includes a bookstore, library, food area with coffee shop and a computer lab. The building was part of $4.7 million in campus additions that began in the fall of 2008.

Campus growth has continued. University officials held a groundbreaking ceremony Oct. 23 for a new $4 million allied health building. The proposed 20,273 square-foot allied health building will house five of the campus’ allied health programs including paramedic, health information technology, physical therapist assistant, practical nursing and registered nursing.

ATU-Ozark offers health care options in health information technology, physical therapist assistant, cardiovascular technology, occupational therapy assistant, medical assisting, nursing assistant, practical nursing, registered nursing, emergency medical technician, paramedic and human services.

HEALTH CARE SUPPORT
Providing health care training was one of the primary ways ATU-Ozark responded when significant job losses hit the Fort Smith following the Great Recession. Much of the immediate job losses came from the regional manufacturing sector. Whirlpool closed its Fort Smith refrigerator plant in June 2012. There were about 1,000 jobs lost when the plant closed, but employment at the plant was around 4,500 in 2006.

The size of the Fort Smith regional workforce during November was 126,795 well below the peak of 140,253 in June 2007 – meaning the November workforce size is down 9.6% from the peak number.

The Fort Smith area manufacturing sector employed an estimated 17,800 in November, down more than 37% from a decade ago when November 2004 manufacturing employment in the metro area stood at 28,600. Annual average monthly employment in manufacturing has fallen from 28,900 in 2005, 19,200 in 2012, and to 18,300 in 2013.

ATU-Ozark began in 2012 to provide air conditioning and refrigeration classes as an option for dislocated workers. The classes were held at Chaffee Crossing.

Following are some of the health sector programs – in addition to the allied health building addition – established at ATU-Ozark in recent years.
• An RN program at ATU-Ozark was approved in January 2012 by the Arkansas Department of Higher Education (ADHE).

• An occupational therapy program through ATU-Ozark began in 2012, with classes held in Russellville.

• The ADHE approved in 2013 a cardiovascular technology program. Classes began in August 2013, with classes held at Chaffee Crossing to provide better access to students from the Fort Smith and Northwest Arkansas areas.

• In 2013, the medical assisting program moved under ATU-Ozark from Arkansas Tech University.

The health services sector in the Fort Smith metro gained jobs as the manufacturing sector declined. Jobs in the Fort Smith metro Education and Health Services sector averaged 15,200 in 2007, and grew to an average of 16,800 in 2013. Based on trends for the first 11 months of 2014, the sector average is likely to fall to around 16,400 in 2014.

HIGH SCHOOL, ADULT ED SUPPORT
The Ozark campus also in the past few years has broadened its program connections to area high school students. In 2011, the Russellville Area Career and Technical Center in merged with ATU-Ozark to form Arkansas Tech Career Center (ATCC). The center now provided career and workforce training to more than 500 students from 11 area high schools in Pope, Johnson and Yell counties, with students eligible to receive concurrent college credits.

Other program additions and expansions include:
• In 2012, the Johnson County Adult Education Center joined the ATU-Ozark Adult Education program;

• Adult Education classes expand to the Charleston-Franklin County Adult Education Center, with adult ed centers located in Booneville, Charleston, Clarksville, Ozark and Paris;

• The ADHE in 2012 ADHE approved the Associate of Applied Science in Human Services;

• The ADHE in 2012 approved the Supply Chain Management option under business technology;

• ASU-Mountain Home partnered with ATU-Ozark to offer in January 2013 ASUMH Funeral Science program courses at Ozark;

• Arkansas State Board of Career Education approves proposal to establish a satellite career-education system for high school students in Paris; and

• A partnership approved in 2014 between ATU-Ozark and Pea Ridge Public Schools allows Pea Ridge students to enroll in credit classes in industrial control systems and welding. 

• The new programs and enrollment gains have been good, obviously, for rural Franklin County. Data and analysis from the University of Arkansas and Arkansas Tech University was presented in 2012 that indicated the ATU-Ozark campus has an estimated annual economic impact of $18.2 million on Franklin County, which is 7.6% of its gross domestic product.

The battle over interchange fees between the nation’s retailers and banks hit a road block as the U.S. Supreme Court decided to not hear the case filed by the National Retail Federation in August.

The cap on swipe fees will stand at 21 to 24 cents following the high court decision. The NRF notes that intense lobbying from the financial services industry prompted the Fed to move off its original recommendation for a 12-cent cap. The NRF and other consumer groups have vowed to keep the fight going.

The retail sector expressed disappointed by the court’s decision not to review an appellate court ruling about the 2011 cap set by the Federal Reserve, which exceeded limits imposed by congressional legislation in 2010. Wal-Mart Stores Inc., the nation’s largest retailer, told The City Wire it was not a plaintiff in the National Retail Federation case passed on by the Supreme Court. However, the Bentonville-based retailer did file an amicus brief supporting the NRF challenge before the Court.

“The court’s decision is disappointing because it leaves merchants and their customers paying far more than intended by Congress,” noted NRF General Counsel Mallory Duncan. 

“Federal agencies have flexibility in implementing our nation’s laws, but do not have the discretion to blatantly ignore the wishes of elected officials and the clear language of the statute. The court’s ruling means retailers will keep paying billions of dollars more than they should, and that fee-hungry banks will continue to rake in unearned profits that ultimately come out of consumers’ pockets. We will continue to press the issue.”

The retail sector claims that banks will benefit from the ruling, but Duncan said the battle is not over.

“There is still litigation pending on credit card swipe fees, and policymakers continue to be concerned by the anti-consumer and anti-competitive practices of the card industry,” Duncan notes.

Richard Hunt, president and CEO of the Consumer Bankers Association, praised the Court decision to not hear the case.

“Reasonable minds have prevailed in denying a writ of certiorari. Government mandated price controls, known as the Durbin Amendment, have yet to work as advertised and retailers still have not proved savings have been passed on to consumers,” Hunt noted in a statement. “Make no mistake about it – consumers must come first in this process, not the bottom-line of retailers. This drawn-out fight should put on notice those Members of Congress who insist upon interfering with the free market.”

Swipe fees are a percentage of the transaction that banks take from retailers each time a credit card is swiped to pay for a purchase, averaging about 2%. Banks also took a percentage of the transaction for debit cards until October 2011, when they were capped at a flat fee of about 21 cents per transaction (down from an average of about 45 cents) under the Dodd-Frank Consumer Protection and Wall Street Reform Act.

Many retailers have cited swipe fees as their second or third highest cost behind salaries and employee health benefits. With retail industry profits averaging only about 2 %, there is no room for retailers to absorb the expense, so swipe fees are passed on to customers in the form of higher prices. 

By NRF estimates, swipe fees cost the average U.S. household about $400 a year and hurt retail sales because consumers buy less when prices go up.