The question for Arkansas’ home sales market going into 2014 was if the healthy pace of growth in 2013 could be maintained. It could, and it was. There were 21,447 homes sold in Arkansas’ four largest markets in 2014, up 3.8% over 2013 and up 17.33% over 2012.

Not keeping pace was the average home price. That average was $165,714 in the four markets, down 0.54% compared to 2013, but up 1.39% compared to 2012, according to The City Wire’s Arkansas Home Sales Report.

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

The total value of home sold in the four markets during 2014 was $3.554 billion, up 3.24% over 2013 and up 18.97% compared to 2012.

Gains in the number of homes sold in 2014 certainly varied by market. Sales totaled 9,904 in central Arkansas, up 2.32%. In the Fort Smith region, which has an economy not yet on stable footing, home sales were up a surprising 14.33% for the year.

Kevin King, owner of Weichert King Realty Group, said his Fort Smith firm posted a banner year.

“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. 

In the booming Northwest Arkansas region, home sales totaled 7,314, up just 0.63% over 2013. However, Benton County had the most home sales – 4,671 – in 2014 of any Arkansas county. Pulaski County was second with 4,548 home sales in 2014.

George Faucette, co-owner of the Northwest Arkansas Coldwell Banker franchise, said the market was off slightly in 2014, primarily due to fewer closings in November and December compared to prior years.

“We have not compiled our final 2014 stats but my projection is that our company will also be off comparatively. In my opinion, this is due to two factors, a leveling off of the pent-up demand seen in 2013 and a tighter inventory of home in most price ranges in the latter half of 2014,” Faucette said.

Home sales in the Jonesboro market totaled 2,234 – the first time ever for more than 2,000 home sales in that market – during 2014, up 13.4%.

THE REGIONAL PICTURE: 2014
Central Arkansas — Home sales
Jan.-Dec. 2014: 9,904
Jan.-Dec. 2013: 9,679
Jan.-Dec. 2012: 8,791

Fort Smith area — Home sales
Jan.-Dec. 2014: 1,995
Jan.-Dec. 2013: 1,745
Jan.-Dec. 2012: 1,616

Jonesboro area — Home sales
Jan.-Dec. 2014: 2,234
Jan.-Dec. 2013: 1,970
Jan.-Dec. 2012: 1,745

Northwest Arkansas — Home sales
Jan.-Dec. 2014: 7,314
Jan.-Dec. 2013: 7,268
Jan.-Dec. 2012: 6,127

The top five counties in terms of Jan.-Dec. 2014 home sales:
Benton — 4,671, up compared to 4,596 in 2013
Pulaski — 4,548, up compared to 4,499 in 2013
Washington — 2,643, down compared to 2,672 in 2013
Craighead — 1,787, up compared to 1,561 in 2013
Saline — 1,648, up compared to 1,570 in 2013

Link here for a PDF document of the December and full year 2014 data.

DECEMBER NUMBERS
December home sales in the four markets totaled 1,573, up 1.61% compared to December 2013, and up 23.28% compared to December 2012. The average price per home in the four markets during December was $165,472, up just 0.01% compared to December 2013, and down 2.19% compared to December 2012.

The total value of sales in the four markets during December was $260.287 million, up 1.63% compared to December 2013 and up 20.58% compared to December 2012.

There were 690 homes sold in central Arkansas, down 6.63% compared to December 2013, and up 17.15% compared to December 2012.

December home sales totaled 556 in Northwest Arkansas, up 1.46% compared to December 2013, and up 24.66% compared to December 2012.

Jonesboro area home sales totaled 178, up 47.11% compared to December 2013 and up 50.85% compared to December 2012.

In the Fort Smith area, home sales totaled 149, up 6.43% compared to December 2013, and up 21.14% compared to December 2012.

The total value of the sales during December were down 5.97% in central Arkansas, up 4.64% in Northwest Arkansas, up 35.97% in the Jonesboro area, and up 4.93% in the Fort Smith region.

Arkansas tax collections for the first seven months of the fiscal year are up 3.8%, with sales and use tax collections – a measure of consumer spending and confidence – up 1.9% year-to-date.

Gross revenue between July 2014 and January was $3.614 billion, up $131.8 million compared to the same period in the previous fiscal year, and 2.2% above what was forecasted.

Individual income tax collections for the first seven months of the fiscal year totaled $1.76 billion, up 4.7% from last year and 2.3% above the budget forecast, according to the report issued Tuesday (Feb. 3) by the Arkansas Department of Finance and Administration.

Year-to-date sales and use tax collections were $1.303 billion, up 1.9% compared to last year and 0.7% below the budget forecast. Income taxes and the sales and use tax collections are the two primary sources of state revenue.

“January results were above forecast in all major revenue collection categories. The
results represented broad-based gains, spanning business and household categories of
taxable activity,” noted John Shelnutt, head of the Department of Finance and Administration’s Economic (DFA) Analysis & Tax Research division.

Corporate income tax collections for the first seven reporting months of the fiscal year totaled $257.9 million, up 10% compared to last year and 11.8% above forecast.

JANUARY NUMBERS
January gross revenue was $615.8 million, up 9.9% from last year and 9.7% above forecast.

Individual income tax collections during January totaled $356.2 million, up 11.3% compared to January 2013 and above forecast by 11.2%.

January sales and use tax revenue was $193.2 million, up 8.2% compared to January 2013. The collections were 6% above budget forecast. Sales tax collections are a reflection of consumer spending and consumer confidence.

Corporate income tax collections in January totaled $33.5 million, up $2.6 million compared to January 2014, and above forecast by 27.8%.

OTHER TAX COLLECTIONS
Alcoholic beverage
July 2014 - Jan. 2014: $30.9 million
July 2013 - Jan. 2013: $30.2 million

Games of skill
July 2014 - Jan. 2014: $24.4 million
July 2013 - Jan. 2013: $21.7 million

Tobacco
July 2014 - Jan. 2014: $129.9 million
July 2013 - Jan. 2013: $130.8 million

Insurance
July 2014 - Jan. 2014: $45.6 million
July 2013 - Jan. 2013: $45.3 million

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

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

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

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

Arkansas Attorney General Leslie Rutledge said Arkansas will receive $21.5 million as a result of a $1.375 billion state-federal settlement involving Standard & Poor’s Financial Services.

Arkansas, the U.S. Department of Justice and a coalition of 18 other states and the District of Columbia reached the settlement with Standard & Poor’s resolving allegations that S&P misled investors when it rated structured finance securities in the lead-up to the 2008 financial crisis.

“Today, I am pleased to announce that after years of hard work and litigation, S&P is finally being held accountable for its role in the 2008 financial crisis,” said Rutledge. “Arkansas consumers expect, and are entitled to, an impartial independent analysis of securities from credit-rating agencies. Unfortunately, for many years, S&P placed profit above people. But thanks to the work of this partnership between the States and the Department of Justice, we are demonstrating that no company, no matter its size, can circumvent the law.”

In early 2013, Arkansas joined the lawsuit against S&P.

The federal and state complaints against S&P alleged that, despite S&P’s repeated statements emphasizing its independence and objectivity, the credit rating agency allowed its analysis to be influenced by its desire to earn lucrative fees from investment bank clients – while investors and other market participants, including state regulators, relied on S&P’s promises of independence and objectivity.

In addition to the financial settlement, S&P has agreed to a statement of facts acknowledging conduct related to its analysis of structured finance securities. S&P will also comply with all applicable state laws, including the Arkansas Deceptive Trade Practices Act, and for five years will cooperate with any request for information from any state expressing concern over a possible violation of state law.

In addition to Arkansas, the states involved in today’s settlement include Arizona, California, Colorado, Connecticut, Delaware, Idaho, Illinois, Indiana, Iowa, Maine, Mississippi, Missouri, New Jersey, North Carolina, Pennsylvania, South Carolina, Tennessee and Washington as well as the District of Columbia.

Retail behemoth Wal-Mart Stores may not admit it but retail experts don’t doubt there is already a team in Bentonville mulling the opportunities that may await just 90 miles off the south Florida coast. 

Political action is still in the early stages with respect to relaxing U.S. travel restrictions to Cuba for U.S. tourists, the opportunities to open commerce with the island nation are openly discussed across multiple business sectors, including retail.

Dr. Raja Kali, professor of global economics at the University of Arkansas, told The City Wire that the stars are lining up for more open relations with Cuba. For example, falling oil price have hit Venezuela hard – a country that was Cuba’s major supporting nation.

“Cuba has been left to fend for itself,” he said.

Kali said there is a huge economic benefit to Cuba at stake in working with the U.S. government to relax controls that could foster U.S. investment in the island nation.

The trade embargo imposed in 1960 by the U.S. has hurt Cuba, but it also has affected the U.S. In a study published in 2012, the U.S. Chamber of Commerce estimated it cost the U.S. economy $1.2 billion per year in lost sales and exports. Cuban officials pegged the embargo's cost to the island at $685 million annually.

RETAIL OPPORTUNITY
“Despite some obvious limitations — it is an island and a population with almost no current economic power still operating under a highly restrictive Communist government. Cuba does have over 11 million people and what can only reasonably be expected to become a substantial, and growing, number of tourists,” said Ryan Matthews CEO of Black Monk Consulting. 

He said Cuba is a “nascent mega-market for retail, especially if capitalism begins to sink its seductive tendrils into the fertile fields of a post-Socialist society.”

Matthews told The City Wire that Cuba seems an ideal market for Wal-Mart.

“I'd be surprised if there wasn't a team in Bentonville already working on a preliminary strategy. Walmart has learned the hard way about entrance into Latin American markets and it has vast institutional knowledge of how to cater to poor shoppers, balancing expectations and aspirations against dignity and respect. Seems like a no-brainer to me,” Matthews said.

Wal-Mart Stores did not return a request for comment on this story. The retailer is in its 60-day quiet period before it reports earnings Feb. 19.

INSIDE CUBA 
Dr. Kali said Cuba is an anomaly in that it’s a tiny, poor island nation with a highly developed biosciences and health sector. He said Cuba is a major developer of vaccines that are used within the third world. He said there are opportunities for this sector within Cuba to flourish if trade with the western world is eased. This could put more money into Cuba’s economy. Also, the sugar, tobacco and coffee industries all hold potential for Cuba.

He said companies like Monsanto and Cargill could potentially work with Cuba to increase agricultural output with better efficiencies. Kali said Cuba trades with much of the world including Canada.

On the flip side, Cuban consumers have very little disposable income ($20 per month on average) and are in need of basic staples like cooking oil and toilet paper. Increasing the wealth among Cuban consumers could be done only if government controls inside Cuba are relaxed, he said.

He said economically the scope of opening Cuba would be on par with some of the European Eastern Block nations after the fall of the Berlin Wall in the late 1980s. Romania, one of those block nations, was closed off for decades but now has growing tourism, tech and financial services sectors.  

“Cuba too, has a lot it could gain with these U.S. talks and potential easing of commerce barriers,” Kali said.

He said Cuban officials can look at Taiwan or Singapore to learn how small island export nations can win when they trade with consuming countries like the U.S. 

TOUGH MARKET
No one thinks it will be an easy road into Cuba even if the U.S. government is able to relax trade and tourism rules and the Cuban economy begins to improve.

“Cuba is a complicated and volatile market, yet (President) Obama’s recent decision to open diplomatic relations might pave the way for opportunity,” said Carol Spieckerman, CEO of newmarketbuilders in Bentonville.

She said Cuba is an attractive market, not only because of its native population, but also the thousands of U.S. tourists and more than 1 million Canadian travelers who visit the country annually. Spieckerman said tourism should ratchet upward if talks go well and regulations and sanctions ease.

“At the same time, Wal-Mart would have to be ready for things to go haywire at the drop of a hat as any business operating there is subject to the whims of the state. Given that Internet connectivity is sparse and expensive, Cuba would not qualify as a market that Walmart could effectively address digitally, at least for the short term, so (physical) stores would be the answer,” Spieckerman said.

She doesn’t necessarily see the small formats as the way Wal-Mart might enter Cuba. Spieckerman said small stores set up to serve the tourists may look like a good way for retailers to tiptoe into the new market, but in so doing they could be be seen as more of a threat to local businesses than if Wal-Mart were to open a supercenter in Havana.

‘HUNGRY CONSUMER MARKET’
Carl Tannenbaum, chief economist with Northern Trust, said there is ample opportunity for American businesses if Cuba’s doors are opened.

“Major league baseball would be an early winner and of course tourism. But it’s important to note that U.S. hotels lost loads of money when Cuba closed its doors around 1960. They will likely tread cautiously if the doors reopen. Retailers like Wal-Mart also have an opportunity to get in on the ground floor of this largely untapped hungry consumer market,” Tannenbaum told The City Wire. 
 
Jason Long, CEO of St. Louis-based Shift Marketing Group, also sees Wal-Mart “dipping their toe in the water in Cuba with new stores.”

“The upside may not be huge – at least initially, but the downside could be mitigated with a slower rollout. It would take time and energy to learn the market, but if there is a U.S. retailer who could pull it off it would be Wal-Mart. I also like the home improvement (and) hardware retail opportunities. I think Home Depot and the Hardware Coops would want to take a close look at Cuba as well,” Long said. 
 
GOVERNMENT ACTIONS
The political arena is split on the topic of opening Cuba to U.S. tourism and commerce. But a bipartisan group last week introduced a bill in the Senate that seeks to lift the Cuba travel ban. U.S. Sen. John Boozman, R-Ark., was part of the bipartisan group.

The Freedom to Travel to Cuba Act of 2015 aims to legislatively address the administration’s proposal to loosen travel restrictions to Cuba and remove restrictions on banking transactions incidental to travel. An identical bill is being introduced this week in the House by U.S. Reps. Jim McGovern, D-Mass., and Mark Sanford, R-S.C.
 
“I really do believe that the way you change the world is through personal relationships. If we are serious about bringing real change to Cuba, we need to expose the Cuban people to our democratic ideals. That clearly hasn’t been accomplished with this travel ban in place. It’s outdated, inconsistent and lifting it would be a good first step toward overall reform,” Boozman said.

Boozman also has supported efforts to end the embargo of U.S. agricultural exports to Cuba because it would create new markets for Arkansas farmers. That said, he would like to see Cuba work on improving human rights in country.

The Senate group stopped short of trying to lift the U.S. trade embargo against Cuba. Instead, they are taking baby steps forward and aiming for a smaller victory by trying to lift the ban on U.S. citizens and legal U.S. residents traveling to Cuba as tourists.

Last month the Obama administration eased restrictions on travel to Cuba for Americans whose trips fit into one of 12 approved categories, including educational, religious and humanitarian reasons. But only Congress can lift the ban on tourist travel to Cuba.

In December, President Obama announced that he and Cuban President Raul Castro would work toward normalizing relations between the two nations. The historic deal includes the establishment of embassies in Washington and Havana.

The president's action has been opposed by Senate Majority Leader Mitch McConnell, R-Ky., and House Speaker John Boehner, R-Ohio. Only Congress can lift the trade embargo, approve a U.S. ambassador to Cuba and fund embassies there.

A bill that would repeal the Patient Protection and Affordable Care Act, also known as Obamacare, sent a clear message to the other end of Pennsylvania Avenue, members of the state’s congressional delegation said Tuesday.

The bill, House Resolution 596, passed by a 239-186 margin in the House. The resolution, sponsored by Rep. Bradley Byrne, R-Ala., had 98 cosponsors for the bill.

All four members of Arkansas’ Congressional delegation – Reps. Rick Crawford, R-Jonesboro, French Hill, R-Little Rock, Steve Womack, R-Rogers and Bruce Westerman, R-Hot Springs – voted yes on the resolution.

OBAMA DEFENSE
In remarks made Tuesday before the House vote, President Obama chastised Congress for the planned move to repeal the Affordable Care Act. The President made his remarks during an “ACA Letter Writer Roundtable” held at the White House.

“It was maybe plausible to be opposed to the Affordable Care Act before it was implemented, but now it is being implemented and it is working. And people are being covered, just as anticipated. The premiums on average are less than $100 when you take into account the tax credit, so it is affordable for the people that it was designed to help. Health care inflation is at its lowest rate in 50 years. The overall tab for the Affordable Care Act is costing less than the original projections,” Obama said. “In every respect, this is working not just as intended but better than intended. And so the notion that we would play politics with the lives of folks who are out there working hard every single day, trying to make ends meet, trying to look after their families, makes absolutely no sense. And that’s a message that I want to send very directly, today.”

ARKANSAS DELEGATION RESPONSE
Womack, who cosponsored the bill with Hill, said the Affordable Care Act has harmed businesses and individuals alike.

“Obamacare has increased costs for families and businesses alike, killed jobs, made full-time employment harder to find, and limited choice in and access to health care.  Now that the law is fully implemented, it’s clear that this law is more of a train wreck than ever,” Womack said. “Americans deserve better, and they should be able to choose the health care plan they want, which doctors they see, and the costs they can afford instead of receiving directives from the federal government. I applaud the passage of this bill, which repeals Obamacare and paves the way for a serious, patient-centered alternative to replace it.”

Westerman, who previously served in the Arkansas House, said he believes families have been impacted as well.

“I am proud to follow through on a commitment I made to my fellow Arkansans: cast my vote to repeal to Obamacare. The president’s namesake law has been damaging to hardworking Arkansans, resulting in lost insurance, reduced hours, lost jobs, less access and, as many will find out soon if it is not repealed, higher tax bills,” Westerman said. “The people spoke in November. It remains to be seen whether President Obama will listen or instead choose to protect his legacy.”

Hill said a repeal is needed to provide the country with a clean slate from which to implement a better plan for health care.

“This is an opportunity to recognize the flaws of mandates and a top-down approach to health care, and allows us to finally consider ideas that will result in a health care system that empowers and encourages individuals to take control of and responsibility for their health care through the use of tools like health savings accounts and incentives that reward healthy behaviors,” Hill said in a statement.

The resolution now heads to the Senate for approval. However, if approved by the Senate, President Obama has vowed to veto any bill that would strip away the bill.

The resolution is one of several issues being discussed involving the law first approved in early 2010. One of the issues involving a case working its way through the U.S. Supreme Court. The case, King v. Burwell, involves taxes and the exchanges. The case is expected to be heard March 2 in Washington, D.C., with a ruling expected by late June.

The majority of the Fort Smith Board of Directors voted to overturn Mayor Sanders’ veto of funding the Steel Horse Motorcycle Rally at the Feb. 3 regular meeting, but they fell one short of success.

Whenever the Mayor issues a veto, a 5-2 board vote is necessary to override, and unfortunately for those seeking funds, Tuesday night’s 4-3 wasn’t enough.

The Board had previously voted on Jan. 20 to award $84,000 to Steel Horse organizers, but on Jan. 26, Sanders issued a veto stating he could not justify “the use of tax dollars for what I believe should be a private sector effort, just as Bikes, Blues and Barbecue is in Fayetteville.”

In the veto, the Mayor pointed out that 20 other non-profit organizations went through a lengthy process in competing for a share of $145,800 in general fund monies and it was questionable the city could, after that rigor as well as the 2015 budget prep, “suddenly find an additional $84,000 in the budget for a brand new start-up effort which is almost 60 percent of the budget for those organizations with performance histories.”

Sanders also wrote the ordinance set "an unhealthy precedent, which has already manifested itself in notification by another new organization informing the City that substantial funds to support that event will be requested from the City."

Sanders reiterated these points at Tuesday’s meeting while stating that he ultimately supported Steel Horse efforts and the good that the rally could do for the city, but this particular funding mechanism wasn’t something he could get behind even if the amount requested was reduced.

City Director Mike Lorenz, who voted Yes to an override, took issue with the idea that awarding Steel Horse the funds set an “unhealthy precedent,” pointing out a number of other events that have received general fund donations outside the standard process over a 10-year period. Those events, which Lorenz obtained from the city’s Finance Department included the following:
• Blues Festival, $126,000
• Festival on the Border, $37,440
• Cox Communications community event, $41,944
• Juneteenth, $18,600
• Heritage Festival, $5,874
• Area Agency on Aging, $1,078,000
• SRCA, $2,600,000
• Project Compassion, $94,000
• Fort Smith Museum of History, $200,000
• U.S. Marshals Museum, $150,000

“And not included in that,” Lorenz added, “there was $33,590 contributed to the Fort Smith Classic Golf Tournament.”

He continued: “I just want to make it clear that I don’t agree with the comment of this setting precedent. I believe the precedent was already there. This is all money provided to these outside events outside of the standard process.”

Ultimately, Lorenz and City Directors George Catsavis, Kevin Settle, and Don Hutchings, voted to override; but Directors Keith Lau, Andre Good, and Tracy Pennartz were enough to affirm.

Steel Horse organizer Dennis Snow said “it was never about the money,” but instead doing something to benefit the city and its citizens, and thanked everyone who did support the rally, noting the event was still going to happen on May 1 and 2, 2015. In comments to The City Wire, he discussed where the event stood and what it needed to move forward.

“This rally is for the people and now it will be funded by the people. We’ll do the best we can from businesses as well as individuals,” Snow said. “We already have over 200 individuals, who have agreed to devote their time. Now we need folks to open their checkbooks for a tax deductible donation.”

HIRE-FIRE ISSUE
Also Tuesday night, the Board voted to table an ordinance redefining personnel authority of the City Administrator moving forward. In November 2013, the Board voted to empower City Administrator Ray Gosack to make hiring and firing decisions regarding department heads. The new ordinance would take that power away from Gosack and redistribute it to the Board of Directors.

Organizers for the Take Back the Fort petition effort to change Fort Smith’s form of government from City Administrator-led to Mayor-Council-led, voiced their support for the ordinance.

Jack Swink, one of the lead organizers, spoke first pointing out a “lack of accountability and transparency that this form of government has to the citizens.” Upon making comparisons to other cities of Fort Smith’s size that do not have a City Administrator form of government, Mayor Sanders asked Swink to take his seat or speak specifically to the ordinance.

As Swink continued with his prepared statement, Sanders asked a police officer to “ask Mr. Swink to have a chair,” touching off several angry comments from the audience.

Don Bales, another lead organizer of the effort, said he felt Swink’s comments were “on point,” adding that “what you (Sanders) just did is exactly what we were talking about. Because once this portion of the meeting is over, the town hall meeting won’t be televised.”

To this, Sanders said, “If you’re looking for TV time, this is not the time to do it.”

“I’m looking for transparency in government when everyone wishes to speak,” Bales said. “I’m for giving the hiring and firing authority of the city back to the citizens.”

Director Settle agreed that hiring and firing power should be given back to the Board, noting that “it’s the responsibility of us elected to be the voice of the people,” and that “we seven are elected every four years, and ultimately I think the department heads need to be responsible to the people, which is us.”

“Ultimately I disagree with the policy from 18 months ago, and want to see if the board would want to put it back as it was for the last 45 years,” he added.

Lau, who had previously voted for the ordinance 18 months ago, said he probably “wouldn’t have voted for it if I’d known it was going to be used as an opportunistic moment for whatever cause is out there.”

Lau said he would like to instead have a discussion as to whether or not the policy has been effective, noting that so far he believes it hasn’t, but that didn’t mean it would be ineffective over the long term.

The Board plans to discuss the ordinance further at the next study session and revisit in two weeks at the Feb. 17 meeting.

With 2014 net income up more than 190% and annual revenue up almost 14%, officials with Fort Smith-based ArcBest plans to spend $200 million during 2015 to modernize and expand its trucking equipment, build new facilities and invest in technology.

ArcBest, a transportation holding company with less-than-truckload carrier ABF Freight as its largest subsidiary, reported early Wednesday (Feb. 4) full year net income of $46.177 million, up 192% compared to the $15.811 million in 2013, and a wide swing from the $7.7 million loss in 2012.

Total revenue during 2014 for ArcBest was $2.612 billion, up 13.6% compared to 2013.

The company ended the year on a positive note with fourth quarter net income hitting $14.543 million, up 40.5% compared to the 2013 quarter. The per share quarterly earnings of 53 cents per share also beat the consensus estimate of 44 cents. Revenue during the fourth quarter was $664.848 million, up 15% compared to the 2013 quarter.

"We made significant progress this year getting ABF Freight on a firmer path toward sustained, historical profitability and communicating with our customers about the full array of transportation and logistics solutions we offer through all of the ArcBest companies," ArcBest President and CEO Judy McReynolds said in a statement.

ArcBest also made progress toward its goal of diversifying revenue and income streams. For example, the Premium Logistics (Panther) division posted $15.64 million of operating income for the year, or 20.6% of the company’s total unadjusted operating income of $75.869 million. In total, the company’s four non-trucking subsidiaries – Premium, FleetNet, ABF Logistics, and ABF Moving – generated $25.776 million in operating income, or about 34% of the total

ABF Freight delivered $50.093 million in operating income during 2014, a big gain over the $10.033 million in 2013, and representing 66% of the company's unadjusted total.

"In addition to seeing improvements at ABF Freight, we are truly excited about the growth opportunities before us in 2015 in many areas, including truckload brokerage, expansion of premium logistics offerings and ongoing collaboration across all of the ArcBest companies," McReynolds said in the earnings report. "This past year was one of marked change for our company, and we now have many of the strategies and tools in place necessary to unlock the innovation and market share growth required for the next level of success at ArcBest.”

SEGMENT OPERATING INCOME 2014
ABF Freight
2014: $50.093 million
2013: $10.033 million

Premium Logistics (Panther)
ABF Freight
2014: $15.64 million
2013: $6.956 million

FleetNet (maintenance services)
ABF Freight
2014: $3.122 million
2013: $3.274 million

ABF Logistics
2014: $3.835 million
2013: $2.973 million

ABF Moving
2014: $3.179 million
2013: $1.85 million

TONNAGE, SHIPMENT REVENUE GAINS
ABF Freight is still the big wheel in the company even with gains in ArcBest’s non-trucking segments. That wheel spun faster in 2014 with improvements across all key metrics for the subsidiary. Those metrics include:
• Billed revenue per shipment during 2014 was $387.60, up 1.93%;

• Shipments during the year totaled 4.98 million, up more than 7.5%;

• Total tons shipped during the year was 3.359 million, up more than 6.5%; and

• The operating ratio for ABF Freight during 2014 was 97.4%, better than the 99.4% in 2013.

“As expected, ABF Freight's profitability improved as a result of its November 2013 union labor contract that reduced expenses and allowed ABF Freight to be more cost competitive with its LTL industry peers,” the company noted in the earnings report.

2015 CAPITAL PLANS
ArcBest officials also announced Wednesday that capital expenditures for 2015 will be around $200 million, much more than the $86 million in 2014.

Of that, $110 million is for new “road and city tractors and trailers” for ABF Freight to replace aging equipment and rentals. The company says the new equipment will reduce maintenance costs and improve fuel economy.

The company also said it will spend $55 million on real estate and new facilities. In May 2014 the company announced a $30 million plan to build a new office building and data center at Chaffee Crossing and boost corporate employment by an estimated 975 by 2021.

ArcBest shares (NASDAQ: ARCB) closed Tuesday at $38.74. During the past 52 weeks the share price ranged from a $47.52 high to a $29.88 low.

Tool maker Marshalltown Company continues to invest in its growing manufacturing centers in Fayetteville. Jack Murders, vice president of the company’s Arkansas operations, told The City Wire that a 50,000 square-foot addition to its Industrial Drive facility will be presented to the city’s planning and development committee on Feb. 11. 

Murders said the improving construction industry has created more new products, processes and business for Iowa-based Marshalltown which is why the additional space is needed. The local plants make between 3,000 and 4,000 different tools and machinery used in construction. 

He did not provide any financial parameters for the proposed plant expansion. Murders said the large plant on Industrial Boulevard has had no major renovations or expansion in the past 20 years. But, if all goes as expected the company plans to break ground on the large-scale expansion sometime in late April. He said some of that space will be used for warehousing inventory and additional office space.

“I can’t tell you we will have X new employees on the date the expansion opens but I can say we are continuing to add to our workforce as we find qualified applicants because business is good,” Murders said. “Both of our Fayetteville facilities are running multiple shifts.” 

ABSORBING MANUFACTURING JOBS
State Chamber of Commerce records indicate that Marshalltown Company employs between 200 and 299 workers at its two Fayetteville locations. Murders declined to give the exact number. He did confirm that Marshalltown was able to absorb some of the displaced workers from the shuttered Superior Industries plant in Rogers.

Chung Tan, director of economic development in Fayetteville, said Air Filter and Marshalltown Tools are actively hiring displaced Superior workers because the Superior plant in Fayetteville could not absorb the losses on its own.

“I have heard from some who actually moved into higher paying jobs with other local companies and there are some taking advantage of the governor’s workforce retraining opportunity,” Tan said.

Murders said there was some training needed for employees coming from Superior but it has been a smooth transition. He said finding manufacturing talent continues to be a challenge given the technical skills now needed for more automated industry.

“We have a long history of bringing in employees from other manufacturing operations that have ceased operations. ... It’s not unusual for employees to ‘trickle’ in for quite a few months after their previous employer closed down,” Murders said.

Steve Clark, CEO of the Fayetteville Chamber of Commerce, said Marshalltown Company’s support to Fayetteville is nothing new seconding they have been adding to their local plant employment over the years. 

“They have been a pillar of our manufacturing community for three decades. We continue to see leadership from that company. They continue to pick up displaced workers because they understand that a tried and true workforce is essential for keeping manufacturing operations in this region,” Clark said.

Murders said the company is finishing a small expansion at its distribution plant on Armstrong in south Fayetteville. He said the 3,500-square-foot expansion adds 11 new shipping docks needed for the growing business.

“We have added on to the Armstrong plant three times since purchasing it 1989 and we are finishing up a parking lot now,” Murders said. 

This year marks a milestone for the tool maker as it celebrates its 125th anniversary as a tool maker founded in 1890 by brothers Jesse and Lester Williams. The company sells more than 5,000 products which are used in the construction industry and by do-it-yourself home improvement enthusiasts. 

PORT PROBLEMS, ONSHORING
Murders acknowledged that it’s a big year for the company but he also shared some of the challenges the local operations have had endured in recent months from West Coast Port delays. 

“West Coast ports are causing us a problem and have for some time. We anticipated this and have been making allowances for it. We have to carry more inventory, plan for longer lead times from three to four weeks out to eight weeks. We also shifted freight form Long Beach to Seattle/Tacoma but others have done the same thing so we are back to delays,” Murders said.

He said the delays add to operational costs and Marshalltown has not yet seen any dip in its freight surcharges as a result from lower fuel prices.

Murders also said Marshalltown, a U.S. manufacturer, has continued to bring manufacturing back stateside for many of its products that were originally made abroad.

“We started doing that long before the current fad of ‘reshoring’ came into vogue and we’ll be doing it long after the fad fades. We don’t seek out attention for reshoring, but we are primarily a U.S.-based manufacturer and we make our decisions based upon cost-effectively making premium products,” Murders said.

The company has determined that U.S. based manufacturing is increasingly cost effective. That said it continues to source some of its raw materials and finished goods from abroad where it makes sense to do so. 

“The world continually changes and Marshalltown changes with it,” Murders said.

January building permit values in Fort Smith, Greenwood and Van Buren totaled $8.777 million, down 7.29% compared to January 2014. However, Fort Smith and Greenwood did see big value gains during the month.

Fort Smith issued 129 permits in January valued at $6.344 million, up 37% compared to the $4.63 million in January 2013.

Driving the January growth was commercial activity. The city issued 29 commercial permits with a combined value of $3.785 million, well ahead of the $1.259 million in January 2013. Some of the commercial permits issued in January included:
• $613,209 for work at Baldor corporate offices at 5711 R.S. Boreham Drive;
• $583,000 for renovation at Walmart Stores at 8301 Rogers Ave.; and
• $450,000 for work with the Fort Smith Public School District.

New home construction in January was slightly off the January 2014 pace. Fort Smith officials issued eight new home permits with a combined value of $1.61 million, down from the $1.821 million in January 2013. Overall, permits for residential work in Fort Smith had a value of  $2.124 million, down from $2.377 million in January 2014.

The city issued $189.445 million in permits during all of 2014, up 6.61% compared to 2013.

GREENWOOD, VAN BUREN PERMITS
Greenwood issued 10 new permits in January with a combined value of $1.729 million, a big jump over three permits valued at $182,960 in January 2014. The first month of the year can be a roller coaster for the city. January 2013 permit values totaled $1.441 million.

Permit values were driven by five residential projects with a combined value of $1.692 million.

Greenwood permit values totaled $7.918 million in 2014, down 4.4% compared to 2013.

January was a slow month for permits in Van Buren. All construction permits issued in the month totaled $704,700, well below the $4.655 million in January 2014 and below the $2.333 million in January 2013. The January 2014 permit tally reflected a $4 million permit for the Legacy Heights Retirement Center expansion.

Of the January total, residential construction permits totaled $527,700.

Van Buren officials issued $16.813 million in permit during 2014, up an impressive 85.8% over 2013.

BUILDING PERMIT VALUES, 2014 TOTALS
Building permit value gains in Fort Smith and Van Buren helped push regional permit values up almost 6% in 2014 compared to 2013. Several taxpayer-funding projects – water park, police station and schools – helped boost the 2014 regional numbers.

For the year, Fort Smith permit values were up 6.61% and Van Buren permit values were up an impressive 85.7%. Greenwood had a 4.4% decline in permit values compared to 2013.

Fort Smith
2014: $189.445 million
2013: $177.687 million
2012: $136.248 million

Greenwood
2014: $7.918 million
2013: $8.283 million
2012: $8.609 million

Van Buren
2014: $16.813 million
2013: $9.049 million
2012: $9.983 million

Combined total for the three cities
2014: $214.176 million
2013: $195.019 million
2012: $154.840 million

AccuWeather.com is predicting more severe storms in and around Arkansas during the upcoming Spring weather cycle. The severe weather season will ramp up compared to the past three years, as more widespread warm air will prompt unstable conditions.

The Midwest and Northeast are forecast to have a milder start to spring than last year. Meanwhile, colder air will accompany unsettled weather across the central and southern Rockies. In California, drought problems will continue to build despite a few late-season snowstorms and rain in March and April.

Also, a longer, late-winter pattern is expected to continue across the central and southern Rockies. A supply of moisture will set the stage for more rounds of snow for the region.

"Skiers, I think you're going to have some good skiing weather for the Rockies going into March and maybe even April as well," AccuWeather.com Lead Long-Range Forecaster Paul Pastelok said in a statement.

SEVERE WEATHER
Little Rock, Memphis and Jackson, Miss., could be the focus in the heart of severe weather season.

Drier air will work its way across the central and northern Plains at times that could hold back the severe weather in those areas. Places like Oklahoma City, Oklahoma, and Wichita, Kansas, could catch a break.

"We're looking farther east than west," Pastelok said.

Those near northern Florida and southeastern Georgia may experience some early-season severe weather in March and April. By April and May, severe weather will work its way into the Tennessee Valley as well.

"East Texas, such as Houston and Dallas, and maybe even into parts of Louisiana, those are the places to focus on early in the spring," Pastelok said.
 
The number of spring severe weather events has been below normal for the past couple of years, especially the number of tornadoes. On average, around 1,300 tornadoes hit the United States each year, according to the Storm Prediction Center. Since 2012, the United States has averaged around 900 tornadoes per year.

Warmer air will be more widespread across the country this season, increasing the instability of the atmosphere.

"We've had slow starts with stable air hanging around longer through the spring season. This year's a little different,” Pastelok said. "I think we're going to have a lot more tornadoes for the spring season compared to the last couple of years, with it really picking up as we get into April and May in the more traditional areas down south."

OTHER CONDITIONS
In the Midwest and Northeastern states, chilly shots will linger into March. The cool air will be punctuated by milder days, but overall, the eastern half of the nation will have to wait until May for prolonged warmth.

To make matters worse for warm weather lovers, the opportunity exists for a late-season snowstorm around March.

For areas that traditionally receive spring flooding, including the northern Plains and Midwest, this spring won't bring any extreme conditions.

"With the lack of heavy snowfall in the more prone areas this winter and not much heavy rainfall for the early spring, we may get by pretty good this year without much flooding for these areas," Pastelok said. "The weather setup will give these areas a drier ground and a chance for early warmth, maybe even some early heat, going into May.”

Conditions will be decent for farmers in traditional Midwest growing areas with no major disruptions to planting.

However, a quicker start to spring is in the offing for much of the Northwest. At the start of the season, Seattle and Portland are forecast to run several degrees above normal. Both cities will likely average a few degrees above normal overall for the three-month period.

CALIFORNIA DROUGHT
Though more snow is on the way for California into the spring season, it's not expected to be enough to put an end to the state's drought woes.

After a steady supply of rain and snow early in the winter, a second surge of precipitation could arrive for California in late March or early April. The focus will likely be on the central and northern valleys, but even the Desert Southwest could see improvement all the way into early spring.

"I think conditions have improved a little bit, and I think that they'll get another boost going into April," Pastelok said. "We just don't think they're going to get enough to put an end to the drought. They're still going to have some problems."

Those who have served in the U.S. military are likely familiar with the phrase “Hurry up and wait.” But the U.S. Air Force appears to be in a hurry-up-and-move-fast mode with respect to the 188th Wing becoming fully operational in its new intelligence, surveillance and reconnaissance (ISR) mission.

Broad cuts in U.S. defense spending included the removal of 20 A-10 Thunderbolt fighter planes from the 188th Fighter Wing in Fort Smith. It was announced in 2012 that the unit’s mission would change to an intelligence, surveillance and reconnaissance (ISR) mission. The unit converted to the new mission in June 2014.

The unit recently received a “Sensitive Compartmented Information Facility Identification” (SCIF ID) number. It may not sound like much, but the number is required before the unit can proceed with building or operating facilities in which they conduct ISR missions. In the February 2015 issue of The Flying Razorback, Lt. Col. Sonny Stefancic said the SCIF ID came earlier than expected.

“The normal process to obtain a Sensitive Compartmented Information Facility Identification number takes approximately three months. Thanks to diligent work by the National Guard Bureau A2 Special Security Office and the 188th Wing Special Security Office we obtained our SCIF ID for our Initial Operational Capability Modular SCIF in approximately three days,” said Stefancic, who is the commander of the 223rd Intelligence Support Squadron.

The squadron is one of several that comprise the 188th Wing.

A SCIF ID is a key step in the mission conversion process that allows the unit to begin fabricating a temporary SCIF facility which will house the 188th’s combined operations floor for initial operational capability (IOC) for the ISR and remotely-piloted aircraft (RPA) mission sets. The temporary SCIF has 10,000 square feet of space and is estimated to cost $1.38 million. The temp facility will be built within the main hangar of the 188th.

According to the 188th, the temporary SCIF will be used for about three years while the 40,000-square-foot permanent structure is completed. That project is estimated to cost $14.2 million.

The temp facility should allow the 188th to achieve “Initial Operational Capability” (IOC) by the fourth quarter of fiscal year 2015. “Full operational capability” will come for the 188th when the permanent structure is ready. The facilities will house the 188th Ops Group's RPA mission and the 188th ISR Group's intel/spaced-focused targeting – the two primary missions for the newly converted wing.

“This is outstanding news for our wing’s mission conversion,” said Col. Bobbi Doorenbos, 188th Wing commander. “We’re excited that each success brings us nearer to achieving operational capability in both ISR and RPA missions. Our Airmen remain hard at work to ensure each step in the process runs smoothly and gets us closer to our ultimate goal.”

Doorenbos formally took command of the unit on Jan. 13. 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.

The facilities are expected to provide a vital core structure for more than 500 members of the 188th.

“The 188th ISR Group has approximately 350 total personnel (not all are full-time) and the 188th Operations Group has approximately 220 personnel (not all are full-time). Some of those personnel will be housed in other admin facilities on base,” noted Major Heath Allen, executive officer for the 188th Wing, when asked how many people are expected to operate in the temporary and permanent structures. “The number fluctuates based on the number of on-going missions and that info is not releasable.”

John James left the comfort of a successful business to lead an intense $100 million venture fund in Northwest Arkansas. Why? Because James says he’s more interested in the journey than the destination.

It’s been six years since James and his partner Terry Turpin founded Acumen Brands in hopes of selling scrubs to medical professional’s – a career James ditched following completion of his medical residency. 

James, a self-professed nerd and tech junky, said he is far more comfortable starting a business than running the day-to-day operations of a successful venture like Acumen Brands. Fayetteville-based Acumen grew exponentially in 2012 from its Country Outfitter branded business that James and Turpin founded in 2011. 

“It’s a pretty good success story. We started Country Outfitter to sell boots and other western apparel online. We cracked the code on Facebook on Labor Day of 2012 and went from 0 Facebook fans to 7 million in just four months time. The business went from $1 million in 2011 to $15 million in just one month by the end of 2012,” James said last week during the University of Arkansas Business Forecast Luncheon he moderated.

James told business professionals Thursday (Feb. 5) at the Cross Church Summit luncheon that he looked up last year to see a company that had grown from three to 200 plus employees in five years and he felt restless in the role of CEO.

He told The City Wire that his formal title at Acumen is still founder and he’s a very satisfied investor and board member but he reached out last year to Dr. Steve Graves, an organizational strategist and life coach, to help him transition into a new role. That new role may be larger than just a career change for James.

James is working with a group of local investors to raise $5 million toward funding an entrepreneurial residency program with a goal of creating a viable startup each month.

“Given that Acumen is on an upward trek, it has given me the opportunity to look back at the innovation stage of companies, which is what I am most excited about,” James said. “I wanted to get back into the community and mentor some of these startup founders and get some capital funding around them and teach this young class of entrepreneurs about how to start a business.”

He told The City Wire that when students graduate from college they shouldn't be encouraged only to take a corporate job. He believes entrepreneurship should be more of an option, but it will only be a broader option if there is a supporting community with mentors and funding.

“I am working on the final stages of the $5 million funding for this residency program. We will try and start a new company every month or every other month with a team of experts around the table. You need designers, developers and people that drive traffic online and someone to lead the company,” he said.

James said the residency program will start small but hopes to eventually grow into an incubator-type program that could accept multiple teams. He said there would be resources invested in the team that would raise their chances for success. His vision for the program is based on the medical residency model — See, Do, Teach.

$100 MILLION FUND
On Thursday, James had little more to offer on his plans to raise $100 million in capital venture funds in cooperation with Newroad Ventures, which he announced last week.

“It’s too early for details, but I will say the region really needs this type of fund and I want to be a part of it however it shakes out. I want to help with the fundraising and the advocacy of it,” James told The City Wire.

He said $100 million is a challenge and he’s more than ready to do his part. Last week James said there are commitments for almost 30% toward the $100 million. 

“I don’t want to over-speak now but I promise to provide more updates as the funding toward to $100 million goal takes place,” he said.

James has been in the trenches trying to raise capital for his own ventures, and shared that six years ago he could not raise $100,000 to start Acumen Brands. James said when he really needed the early capital to grow the Acumen it couldn’t be found in Arkansas. But once it succeeded the suitors lined up.

“We are missing a seed money capital venture fund in Northwest Arkansas. You can’t tell me that with the world’s largest company in our own backyard that we can’t fund our own capital venture pool,” James said.

Northwest Arkansas, a cradle of entrepreneurship, is well-versed on the importance of the small business community. The region helped birth three Fortune 500 companies that still call it home.

“Small businesses are critical to the success of Northwest Arkansas and the rest of the nation. If you don’t believe me listen to these stats,” Andy Wilson, operational leader at Cross Church said as he opened The Summit panel discussion on Thursday (Feb. 5) in Rogers.

His stats were these:
• There are 28 million small businesses in the U.S.;
• 70% of all small businesses are owned by a single person;
• 57% of all workers are employed by small businesses;
• 44% of the U.S. payroll comes from small businesses;
• 77 million make up the small business workforce; and
• 60% to 80% of all new jobs are created by small businesses.

He asked three of the region’s small business entrepreneurs — Rick West, CEO of Field Agent; John Rausch, CEO of Rausch Coleman Homes; and Dr. John James, former CEO of Acumen Brands — to discuss leadership qualities, culture, and how they might reinvent the future.

LEADERSHIP/MISSION
“General Colin Powell said a good leader has to be able to simplify things, cut through the arguments and debate and ensure that everyone in the chain can understand the mission,” Wilson said.

West, joked that Field Agent is a company full of Millennials who don’t care about lengthy mission statements but simply want to understand why. He referenced a Ted Talk by Simon Sinek that his team at Field Agent was able to follow.

“We learned early on that if we could really understand why we are in business, people would follow the ‘why’ and not the ‘what’ we do,” West said. “We are tech company at heart and we are changing the way data is gathered and used.” 

James, the founder of Acumen Brands, spoke about the company’s biggest success story, Country Outfitters. He said it’s a joke to try and wrap up the leadership or mission in just a few words.

“It took us six years to get there. It’s about finding holes in the market and iterating to fill them. It started out pulling medical scrubs off of shelves and selling them online but we kept iterating until we hit upon the winner,” James said. “We are about trial and failure that’s our culture. We say if you’re not embarrassed by your beta version of your product then you probably launched too slow. We break things and move fast.

Rausch joked that breaking things and moving fast might work for tech companies but he doesn’t recommend it for homebuilders. 

“We value our customers because we know the home they buy could be their largest purchase of their lives. Our mission is to build the best home we can for the value. That never wavers,” he said. “That message doesn’t start with me, it starts out in the field. Our organizational chart is inverted and I am on the bottom,” Rausch said.

Wilson asked the panel to think about what it is their employee base wants from them as leaders.

“Day in and day we can talk about details but what employees really want from me is to know where we are going and more importantly do I have the confidence to know that we can get there,” West said. “It sounds really simple that’s it in a nutshell.”

Rausch said for him it’s about providing clarity (transparency) and empowering employees to go for it when there are constant changes happening in their industry.  Wilson added that without transparency from the top, barriers can build below that can render a company ineffective. James agreed, saying his employees seek out a confidence and assuredness from the leadership. 

“You may have to fake it ‘til you make it, but leaders have to exude confidence,” James added.

REINVENT THE FUTURE
Wilson asked the panel to talk about how they might reinvent the future at their respective companies citing a quote from “Good to Great” author Jim Collins in that the future can’t be predicted but it can be created.

James recalled a time in Acumen’s past when they were looking for what turned out to bey the Country Outfitter success story. He said they were moving quickly and failing fast but when they saw a ray of light the whole team rallied around it. He said it doesn’t take long for consumers to tell you what they think. But it’s critical to listen and adjust quickly.

West said at Field Agent the important aspect is to stay between the rails because the data world is vast. He said the way Field Agent is recreating the future is not by coloring the data differently or analyzing it with a story. He said Field Agent seeks to find solutions to problems or questions that exist. That means staying focused on the questions and finding solutions through crowd sourcing. It doesn’t start at the top but it builds from the bottom. 

James said creating a culture where thinkers are not afraid to fail is the best to keep creativity alive within a company.

“We started out great at Acumen but we lost some of that when raised a little money. It took some time to get back to the mindset,” he said.

Rausch said creativity thrives in areas of necessity and that’s seldom at the top of any organization. 

“For us, our best ideas come from the field and things we see in the industry. A leader has to be willing to listen and try the ideas of others. ... They also need to surround themselves with experts and mentors that will be honest and provide crucial feedback even when you don’t want to hear it,” Rausch said.

The entire panel agreed that customers can’t be discounted in the creativity and innovation equation and businesses of all sizes have to listen to what customers want and exceed those expectations whenever possible.

The City Wire and Things To Do In Fort Smith are working together to provide an entertaining way to deliver recent news and to provide the readers of both websites even more access to regional event information. The website collaboration and weekly video push will also include Northwest Arkansas news and event info. (See below the first installment of the video.)

Things to do in Fort Smith (TTDIFS) is an online hub for all things to do in the Fort Smith region. The concept originated in 2011 with a Facebook page, and in 2013 owner Rham Cunningham collaborated with The Richland Group to launch the website that is now used as the TTDIFS platform. 

Cunningham and The Richland Group provide technical and design support, with blog support coming from area residents and the University of Arkansas at Fort Smith.

Dawson Meadows, Cunningham’s alter ego, is the “anchor” for the about three minute video segments that will be posted each Thursday on both websites.

“I’m excited to announce a new media partnership where ‘local news meets things to do’ as The City Wire and Things to do in Fort Smith collaborate, team up, and play nice together as two dot coms make sweet, sweet content. Enjoy what you see, so we can see what you enjoy,” Cunningham said.

The City Wire is a media company that covers business, politics and culture in the Fort Smith and Northwest Arkansas regions. News on The City Wire also includes statewide business and political news. More than 2.201 million users have visited the website between Nov. 1, 2008 and Dec. 31, 2014, and logged more than 9.94 million pageviews.

Michael Tilley, editor and a co-owner of The City Wire, said working with TTDIFS is a good fit because it provides an entertaining and informative connection to those who visit both sites. The City Wire’s event calendar, which has proven a great resource to Northwest Arkansas and Fort Smith area residents for more than six years, is now connected to TTDIFS – and vice versa.

“We have been hoping to add a regular video element to our content, and the partnership with Rham and The Richland Group is a great way to test formats and measure results,” Tilley said. “We both have strong platforms, which is why I believe this is one of those deals in which the sum is greater than the parts.”

A pair of bills involving the funding and operation of the state’s Private Option healthcare program for the poor and uninsured were approved by the House Thursday afternoon.
The state House voted 80-16, with three voting present, to approve Senate Bill 96 and 82-16 to approve Senate Bill 101.

Also, the Arkansas Senate approved with a 31-0 vote a tax cut plan proposed by Gov. Asa Hutchinson. The Governor is expected to sign the bill into law Friday morning (Feb. 6).

PRIVATE OPTION VOTES
Senate Bill 96, sponsored by Sen. Jim Hendren, R-Sulphur Springs, would end the Private Option on Dec. 31, 2016 and would create a task force to look at the healthcare issue in the state.

Senate Bill 101, sponsored by the Joint Budget Committee, was an appropriations bill that would fund the Department of Human Services, Division of Medical Services budget through June 30, 2016. That bill, which has already passed in the Senate and now heads to the Governor’s desk, would include monies for the operation of the Private Option.

Rep. Kelley Linck, R-Flippin, who chairs the House Public Health, Welfare and Labor committee, said the debate over the Private Option has been one of the most debated issues in the state since a secession vote during the Civil War. Linck said the bill would help with reforming the Medicaid system in Arkansas.

Rep. Josh Miller, R-Heber Springs, who sponsored a bill Wednesday that would end the program as of June 30, 2016, said he believed representatives should live up to their campaign promises.

“You did not make campaign promises to make our colleagues and elected officials happy,” Miller, who voted no, said of the issue.

Rep. Laurie Rushing, R-Hot Springs, said while she was opposed to the Private Option, the bill (SB 101) before the House was “the only path there.”

“There is no perfect bill,” Rushing said to colleagues. “If you are waiting for a perfect bill, you will be waiting 20 years or forever because it will never happen.”

On SB 101, Rep. John Payton, R-Wilburn, asked legislators to hold off on approving the bill because legislators have other budget bills to consider. However, House Speaker Jeremy Gillam, R-Judsonia, said the vote on Senate Bill 101 as well as Senate Bill 96 gives legislators an opportunity to have faith in officials as well as the process.

“There is a fine line between representing our districts and leading,” Gillam said, noting he believes lawmakers should “lead responsibly but lead bold.”

“The vote in the House today on the Health Reform Task Force bill and accompanying appropriation was a bipartisan effort and represents the right step forward as we seek ways to best reform Medicaid in Arkansas,” Hutchinson said in a statement. “I am grateful for the confidence that the legislature has placed in the task force and the opportunity it represents to guide the future of health care reform in Arkansas.”

TAX CUT VOTE
The Arkansas State Senate passed the tax cut bill, SB 6, on Thursday by a 31-0 vote. Hutchinson campaigned on a tax cut plan that would provide tax relief for those making between $20,000 and $75,000 annually.

After adjustments for state statutes and the addition of an alteration of the capital gains tax rate, the final bill passed by lawmakers would:
• Decrease the existing capital gains tax rate exemption from 50% to 40%;
• Lower income tax rates from 6% to 5% for Arkansans making $21,000 to $35,099; and
• Lower income tax rates from 7% to 6% for those with incomes between $35,100 and $75,000.

Annual tax savings for those in the income tax range would save as little as $16 per year up to $540 annually.

The bill has a projected $22.9 million impact to the state in FY 2016 and a $90.3 million impact on the state budget in FY 2017, according to analysis from the Department of Finance and Administration.

The governor plans to hold a bill signing ceremony on Friday morning at 11 a.m. in the Governor’s conference room.

“I want to thank the legislators for their diligent work in passing this tax cut for working Arkansans. I am especially grateful to the leadership of both houses for their efforts on this bill. They truly did the work of the people — and the people of Arkansas will benefit,” Hutchinson said in a statement. “This is an encouraging first step in making Arkansas’s income tax rates more competitive with surrounding states, which will only enhance our reputation as a state that is eager to attract and accommodate new jobs and businesses. Arkansas has been an island of high taxation for too long, and I’m pleased that we are doing something about that.”

Several hundred people stood in long lines at the Blue Lion in downtown Fort Smith to buy U.S. Marshals Service commemorative coins. Up to $5 million of the coin sales could be available to pay for exhibit work at the planned U.S. Marshals Museum in Fort Smith.

Doors to the Blue Lion – the former Second Street Live! building now owned by the University of Arkansas at Fort Smith – opened to the public at 6 p.m. on Saturday, with U.S. Rep. Steve Womack, R-Rogers, selling the first coin to Lenore Beard, 93, the widow of a former U.S. Marshal.

The United States Mint’s commemorative coins honor the 225th anniversary of the U.S. Marshals Service, the nation’s oldest federal law enforcement agency. The coins were first unveiled to the public July 23 during a ceremony in Washington, D.C. The coins officially were placed on sale Jan. 29 and may be purchased online through the museum website.

The coins may be purchased for an introductory price of $412.60 for the gold, $46.95 for the silver, and $14.95 for the clad-half dollar. The U.S. Marshals’ commemorative coins are not intended for general circulation and are produced in limited quantities. The United States Mint is authorized to issue a maximum of 100,000 $5 gold coins, 500,000 silver dollar coins and 750,000 clad half-dollars.

In January 2007, the U.S. Marshals Service selected Fort Smith as the site for the estimated 20,000-square-foot national museum. The museum is to be built on 15.9 acres along the Arkansas River that is being donated by the Robbie Westphal family.

The planned $53 million museum's construction is a three-phase project, starting first with site work before moving to building construction and finally design and installation of exhibits to be housed at the museum celebrating the United States' oldest law enforcement agency. A ceremonial groundbreaking was held in September, and museum officials hope to have the facility open by late 2017.

‘OVERWHELMED’
Lines to purchase the coins did not dissipate for more than an hour. About 20 minutes into the sale, museum officials announced they were already low on certain coins.

Jim Dunn, president and CEO of the U.S. Marshals Museum, was all smiles.

“This is the third time we’ve been overwhelmed in the last three weeks,” Dunn said of the Saturday crowd.

The first was when museum staff had to move to a larger venue for a Feb. 26 speech in Fort Smith by U.S. Supreme Court Justice Antonin Scalia. His speech is the first of three Winthrop Paul Rockefeller Distinguished Lecture Series focused on the history of the U.S. Marshals Service.

“We have more than 2,000 RSVPs for that (Scalia speech). ... We think we’ll have 900 to 1,000 students attend. How many times does a Fort Smith student get the chance to go hear an associate justice of the U.S. Supreme Court speak?” Dunn said through a big smile.

A second overwhelming event was the first day of U.S. Marshals coin sales by the U.S. Mint. According to CoinNews.net, $8.418 million in coins were purchased in the first 12 hours.

Dunn said it could be late March or early April before the museum knows how much money it could receive from the coin sales.

Also at the Blue Lion were Kathy Babb and Mary Young, co-chairs of the first ever “U.S. Marshals Stampede: Kickin’ Up the Dust” fundraiser. The event is set for March 14, 2015, at Kay Rodgers Park in Fort Smith. Babb and Young were selling tickets to the event and raffles for chances on jewelry and a limited edition rifle.

“We’ve had a tremendous response so far,” Young said.

Being the first event, the co-chairs aren’t sure of how many will attend the fundraiser, but are hoping to have between 600 and 1,000 paying guests.

Rep. Charlie Collins, R-Fayetteville, says despite party line differences over his controversial guns on college campuses legislation, he hopes to address enough concerns to win a swing vote to get the bill out of committee later in the session.

Appearing on Talk Business & Politics on Sunday, Collins told KATV’s Janelle Lilley that he wanted to “process” objections raised in a marathon meeting of the House Education Committee on Thursday.

“I haven’t thought yet what the next steps are. I want to take in all the learning I got,” said Collins, the sponsor of House Bill 1077. “As you mentioned, it was a two or three hour exchange, discussion. I want to process all that. What I would love to do is: any of the questions that people asked me, if I could make an adjustment to the bill to resolve those questions.”

The measure eliminates the opt-out provision of a bill Collins passed in 2013. University and college campus boards must now vote annually to allow or disallow employees who are concealed carry permit holders from bringing their guns on campuses. All public universities and colleges in the state voted to bar guns on campus.

But Collins is undeterred.

“I personally believe gun-free zones and places like that are the type that get targeted by some cold, calculating folks and if we were allowed to have concealed carry holders on campus, it would deter some of those attacks,” he said.

The House Education Committee is split with 10 Democrats and 10 Republicans. The vote Thursday on HB 1077 was divided among party lines.

“Once again, we have a pretty clear split in terms of party philosophy on issues like this. And while I respect each representative’s thoughtfulness, and I know they thought about this bill very hard – there were emotions involved in this,” Collins said. “One of the things you see in politics in a very, very large decisions – major things like how do we take care of our loved ones or big budget decisions – you’ll see that party philosophies can be very indicative of how people think.”

American consumers are compassionate folks when it comes to celebrating Valentine’s Day. The National Retail Federation expects average per person spending to top $142.31 this year, up 6.3% from expenditures in 2014.

It seems women are in for the biggest treat this Valentine’s Day. Men will spend nearly double what women plan to spend – $190.53 versus $96.58 on average, respectively. 

Prosper Insights and Analytics notes cumulative sales should reach $18.9 billion, a high mark since their survey began in 2007.

“It’s encouraging to see consumers show interest in spending on gifts and Valentine’s Day-related merchandise — a good sign for consumer sentiment as we head into 2015,” said NRF President and CEO Matthew Shay. “Hoping to draw in eager shoppers, retailers will offer unique promotions on gifts, meal options at restaurants and even experiences.”

The report shows that 55% of adults plan to celebrate Valentine’s Day this year, and that is evenly split among income and age demographics for those under 65 years old. 

One of the popular category gifts is candy as 53.2% of consumers plan to give sweet confections totaling $1.69 billion this year. Candy sales are projected to rise 4.5% from a year ago as consumers have more cash in their pockets from lower gasoline prices.

One in five, or 21.1% of consumers, plan to buy jewelry for a total of $4.8 billion, the highest amount seen since 2010. Last year jewelry sales totaled $3.9 billion. Also, 37.8% will buy flowers, spending a total of $2.1 billion, which is flat with a year ago. 

More than one-third (35.1%) will spend an average of $77 going out for the evening. That will add $3.6 billion dollars to the hospitality sector for movies, restaurants and other forms of entertainment.

“It’s great to see consumers coming out of their shell this year, looking to spend discretionary budgets on those they love once again, though I fully expect many to continue to look for ways to cut costs where they can,” said Prosper’s Principal Analyst Pam Goodfellow. “While many will splurge, some will still look for simple and affordable ways to show their appreciation for friends and family and celebrate in a way they are most comfortable with.”

Celebrants will also spend nearly $2 billion on clothing and $1.5 billion on gift cards.

Spouses looking to treat their significant others comprise the biggest part of the spending plans this year with 91% committing an average $87.94 on gifts and entertainment for their loved one. Lover spending is expected to rise 12.6% from last year’s levels.

Consumers will also commit an average of $26.26 on other family members and $6.30 on children’s classmates and teachers. Pet lovers (21%) will spend a mere $5.28 on average for their beloved animals which equates to $703 million.

According to the U.S. Census Bureau, history is unclear on who was the original Valentine, but the most popular theory is that he was a clergyman who was executed for secretly marrying couples in ancient Rome.

“In A.D. 496, Pope Gelasius I declared Feb. 14 as Valentine Day. Esther Howland, a native of Massachusetts, is given credit for selling the first mass-produced valentine cards in the 1840s,” notes a Valentine’s Day profile from the bureau.

The ever changing world of retail is creating more demand for complex logistics services. That’s a good thing for Fayetteville-based CaseStack, which is expanding operations locally and nationwide to meet the growing demand.

“More companies (not just smaller ones) need a tech-enabled solution. Retailer requirements are always increasing, and it increasingly makes sense for us to hire and train experts instead of every company trying to do it separately,” CaseStack CEO Dan Sanker told The City Wire on Monday (Feb 9).

He said the supply chain management industry is becoming very complex as retailers are operating in multiple channels from brick and mortar big box to e-tail only, and a blended mix of the two. 

“Companies can’t just wing it anymore if they want to grow sustainably. They also need the benefits of consolidation services to reduce costs to retailers. Consumers don’t want to pay for supply chain inefficiencies,” Sanker said.

Monday (Feb 9) and Tuesday (Feb. 10) CaseStack is holding a career fair at its offices in Fayetteville to fill about 95 positions this year across its network of offices.

“We are on a mission to give clients and partners a supply chain competitive advantage.  We only have about 220 people now, so each person is critically important. We have about 70 people in Fayetteville, about 100 around Santa Monica (Calif.), and some folks in Dallas, Chicago, and Scranton (Pa.). We just added five logistics operations professionals in our Atlanta location. We’ll be opening a Cincinnati office this year also,” Sanker said.

The company recently added five new freight brokers in Fayetteville, nearly doubling its local sales force in this separate division amid growing demand for less-than-truckload freight. The company is expanding its local office space at 3739 North Steele Blvd. in Fayetteville by nearly 50% to accommodate for the new employees who will join CaseStack this year.

Sanker said the company is following a strong growth trajectory of about 20% annually  for the past five years. He said the growth requires the company to add new talent and then work to retain it throughout the years.

“The career fair is one of the ways we’ll kick start this year’s development of talent.  We’re ready to speak with talented people who share CaseStack values – collaboration, hard work, intellectual curiosity, excellence and determination,” Sanker said.

He said many companies are recruiting for all positions from operations, customer service, information technology to accounting, but sales and customer management professionals are in the biggest demand.

“I am hopeful that many of our new talent recruits will be in Fayetteville, but we’ll see where the talent bubbles up. As you know, I’ve always believed in Northwest Arkansas, its culture and its future as a cluster for retail technology excellence. I’ve seen that becoming even more of a reality in the past years since I have been here,” Sanker said.

BROAD THINK TANK
In an effort to retain and grow local talent, CaseStack recently initiated a a corporate-wide, multi-functional “Knowledge Sharing Group” (KSG) to better include all CaseStack employees in building the company’s future. 

“The KSG idea bubbled up at a sales meeting from one of our directors of business development, Josh Carmack. It’s really coming together,” Sanker said.

KSG starts with volunteers from functional areas across the company who work together creating a team that discusses corporate objectives, goals, strategies and measures within the vision and core values framework. Sanker said the groups are a positive, constructive think tank of ideas that can help propel the company forward. 

“Equally as important is that each member leaves with a more broad and deep understanding of other functions. Our organization has developed a lot of knowledge. We want to prevent it from living in silos, so we can build more well-rounded teammates leading to better careers, better processes, and a better-performing company,” Sanker said.

GROWTH AND ACCOLADES 
Sanker admits he has no idea how many people will attend the career fair but he’s hoping to see local talent turn out because its needed.

“We are looking forward to a growth year. If we can do our small part to make supply chains better then we also grow and we help (consumer packaged goods) companies and retailers deliver on their promises to give shoppers better products at better value,” Sanker said.

He told The City Wire that CaseStack is backed by private equity, mostly out of California but he hasn’t needed to raise money in many years. Sanker said this year’s expansion is funded by the near 20% annual growth in business revenue since 2010.
 
CaseStack was recognized in 2013 and 2014 as one of the Best Places to work in Arkansas by Deloitte and Inc. Magazine. The company said it offers a competitive compensation package for professionals seeking work in the supply chain and logistics industry.

December’s jobless rate was unchanged in the Fort Smith metro area, but the region continued the trend of decline in the size of the workforce and the number of employed. The one bright spot was that the number of unemployed fell more than 46% compared to December 2013.

Fort Smith’s metro jobless rate was 5.5% in December, unchanged compared to November, but lower than the 7.7% in December 2013, according to figures from the U.S. Bureau of Labor Statistics. December’s data is subject to revision.

The size of the Fort Smith regional workforce during December was 125,500, down from 126,646 during November, but 3.47% below the 130,024 during December 2013. The labor force reached a revised high of 140,253 in June 2007, meaning the December workforce size is down 10.5% from the peak number.

The number of employed in the Fort Smith region totaled 118,635 in December, down from 119,723 in November, and below the 119,964 employed in December 2013. The number of employed in the metro area is down 10.8% compared to the high of 133,061 in June 2006 – or 14,426 fewer jobs than the peak metro employment.

All of the eight metro areas in or connected to Arkansas had jobless rate declines in December compared to December 2013. Five metro areas (Northwest Arkansas, Hot Springs, Jonesboro, Little Rock and Pine Bluff) had jobless rate increases compared to November, and two metro areas (Fort Smith and Memphis-West Memphis) were unchanged compared to November. For the second consecutive month, only the Texarkana metro area had a jobless rate decline compared to November and December 2013.

During December, the lowest metro jobless rate in the state was 4.1% in Northwest Arkansas and the highest rate was 7.6% in the Memphis-West Memphis area.

FORT SMITH METRO NUMBERS
Unemployed persons in the region totaled an estimated 6,865 during December, down from the 6,923 during November, and well below the 10,060 during December 2013.

Jobs in the Trade, Transportation and Utilities sector — the region’s largest job sector —  totaled 25,100 in December, up from 25,000 in November, and above the 24,800 during December 2013. Employment in the sector reached a high of 25,700 in December 2007.

The Fort Smith area manufacturing sector employed an estimated 17,900 in December, up from 17,800 in November, and below the 18,400 in December 2013. Sector employment is down almost 37% from a decade ago when December 2004 manufacturing employment in the metro area stood at 28,400. Annual average monthly employment in manufacturing has fallen from 28,900 in 2005, 19,200 in 2012, and to 18,300 in 2013.

Employment in the region’s tourism industry was 9,500 during December, down from 9,900 in November and above the 9,200 in December 2013. The sector reached an employment high of 9,900 in August, September and November.

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

In the Government sector, employment was 19,600 during December, down from 19,700 in November and up compared to 19,400 in December 2013.

NATIONAL NUMBERS
Unemployment rates were lower in December than a year earlier in 341 of the 372 metropolitan areas, higher in 25 areas, and unchanged in six areas, noted the broad BLS report.

The U.S. unemployment rate in December was 5.6%, down from 5.8% in November and down from 6.7% from a year earlier. Arkansas’ jobless rate was 5.7% in December, down from 5.9% in November and down from 7.4% in December 2013.

Oklahoma’s jobless rate during December was 4.2%, down from 4.4% in November, and down compared to 5.4% in December 2013. The Missouri jobless rate during December was 5.4%, down from 5.6% in November and below the 6% in December 2013.

ARKANSAS METRO AREAS
Fayetteville-Springdale-Rogers
Dec. 2014: 4.1%
Nov. 2014: 3.9%
Dec. 2013: 5.1%

Fort Smith
Dec. 2014: 5.5%
Nov. 2014: 5.5%
Dec. 2013: 7.7%

Hot Springs
Dec. 2014: 6%
Nov. 2014: 5.8%
Dec. 2013: 7.5%

Jonesboro
Dec. 2014: 5.1%
Nov. 2014: 4.8%
Dec. 2013: 6.6%

Little Rock-North Little Rock-Conway
Dec. 2014: 5%
Nov. 2014: 4.8%
Dec. 2013: 6.3%

Memphis-West Memphis
Dec. 2014: 7.6%
Nov. 2014: 7.6%
Dec. 2013: 8.5%

Pine Bluff
Dec. 2014: 7.2%
Nov. 2014: 6.8%
Dec. 2013: 9.7%

Texarkana
Dec. 2014: 5%
Nov. 2014: 5.2%
Dec. 2013: 7%

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